Wavecom rejects Gemalto offer

Wavecom is not happy with Gemalto's cash offer of €7 per share

Wireless communications firm Wavecom has rejected a take-over bid from security outfit Gemalto following its unsolicited cash offer of €7 (£5.53) per share on Monday.

Gemalto reckons that its offer represents a 72 per cent premium over the closing price on 3 October 2008, and a 50 per cent premium over the volume weighted average share price in the preceding three months, but Wavecom deemed the bid "inadequate".

Following Monday's announcement, Wavecom's share price jumped 55 per cent on the Nasdaq from $5.60 (£3.23) to $8.72 (£5.03), and is currently trading at around $9.15 (£5.28) following the board's response.

"Machine-to-machine is an attractive and growing market, with the opportunity to connect billions of devices, and Wavecom is at the forefront of this industry," said Olivier Piou, chief executive at Gemalto, on Monday.

Wavecom's board, however, believes that the offer is not in the best interests of the company, its shareholders or its employees.

"While Wavecom is always interested in any transaction that benefits shareholders and other stakeholders, we have concluded that the proposed acquisition by Gemalto fails to deliver sufficient value to merit support," said Anthony Maher, independent director and chairman of Wavecom's M&A sub-committee.

The board is set to offer a formal and more detailed response to the hostile bid, in accordance with regulations laid down by Autorités des Marchés Financiers, the French stock market authority, and reiterated its confidence in the management and employees of Wavecom.