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New Shareholder Rejects VW's Scania Offer

NEW YORK (The Deal) -- Volkswagen's 6.7 billion ($9.27 billion) pursuit of Scania remained stuck in the slow lane as another shareholder in the Swedish truckmaker on Wednesday, April 23, voiced its opposition to the deal.

Shareholders have until Friday to accept the 200 Swedish kronor ($30.49) a share offer, which Volkswagen will only pursue if it secures 90% acceptances. Analysts at JPMorgan Chase (JPM - Get Report) warned in a Tuesday note that reaching the threshold is "not a given", and that any increased offer could harm Volkswagen's reputation and open the doors to potential lawsuits.

Scania shares were down 4.2% at Skr175.30 by early afternoon in Stockholm on Wednesday after Swedish pension provider Alecta, which owned 2.04% of Scania at the end of March, came out against the tie-up. Volkswagen shares were down just under 1% at 192.75 in Frankfurt.

"Our decision to decline the offer is based on an assessment of our internal analsysis and the conclusion of the independent Scania directors, namely that the offer does not fully reflect Scania's long-term fundamental value," Alecta said. "The decision has not been easy, but in the longer term, we believe that this is what best serves the interests of our clients."

Together with MAN, Volkswagen owns 62.6% of Scania and controls 89.2% of its voting rights. Buying the rest would allow Volkswagen to simplify its truck and commercial vehicle manufacturing activities.

Earlier this month the German carmaker declared its offer final despite opposition from independent Scania directors.

Independent Scania directors have also declared the bid to be too low and urged minority shareholders to reject it. Swedish pension fund APR, which owns 0.6% of Scania, and Swedish insurer Skandia, which owns a 0.9% stake, have both said they won't accept Volkswagen's bid.

Not all minority shareholders oppose the deal. On Tuesday, Rye, New York-based Gamco Investors Inc. announced that it would sell its 4.8% stake.

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