Two investor groups bidding for Thyssenkrupp’s 16 billion euros ($17.4 billion) elevator business are making last-minute tweaks to their binding offers this week and could nudge them higher, people familiar with the matter said.
A consortium of Blackstone, Carlyle and the Canada Pension Plan Investment Board (CPPIB) is competing with Advent and Cinven, which are supported by Germany’s RAG Foundation and the Abu Dhabi Investment Authority.
The sale would be the largest buyout since Blackstone’s purchase of U.S. industrial warehouse properties from Singapore-based logistics provider GLP for $18.7 billion last year, according to Refinitiv data.
Both bidders submitted binding offers of close to 16 billion euros for Elevator Technology on Feb. 11, with the Blackstone-led consortium’s bid slightly higher, people familiar with the matter have said.
Spokespeople for Thyssenkrupp and the two bidding groups declined to comment.
The two consortia cleared a major hurdle over the weekend by agreeing to demands by union IG Metall, which is keen to secure jobs, sites and budgets at the world’s fourth-largest lift maker.
The ball is now in the court of Thyssenkrupp’s management board, led by Chief Executive Martina Merz, which has to make a recommendation to the group’s supervisory board ahead of a meeting on Feb. 27, when a decision is expected.
“We see further upside during the final round,” Rochus Brauneiser, head of steel at Kepler Cheuvreux, said. Rochus is the top analyst for Thyssenkrupp based on StarMine, which ranks analysts based on their earnings accuracy.
The people familiar with the deal said so-called sales and purchase contracts were being hammered out and that both consortia could still raise their bids to gain the upper hand until Feb. 26, the people said.
While both groups are aiming to buy the business in full, Advent and Cinven are more open to letting Thyssenkrupp take a minority stake following the sale as they would be slightly stretched in a full offer, the people said.
A deal worth around 16 billion euros would give the business valuation of 18.1 times its core earnings, while Schindler and Kone trade at 12.5 and 15.3 times their core earnings respectively.
Source: Reuters.com