Gemalto is fighting tooth and nail against a hostile takeover attempt from Atos, a France-based IT services firm. Atos came forward with an offer of EUR 46 for outstanding and issued shares of Gemalto, equivalent to an offer of EUR 4.3 billion, or about $5.1 billion – a price that “significantly undervalues” Gemalto, according to a statement issued by the company in response.
The takeover attempt comes after a difficult year in which Gemalto has posted four profit warnings; more broadly, Gemalto has struggled to maintain a fast pace in its transition away from declining areas like its removable SIM business and into new areas in the enterprise, government, and M2M sectors. Gemalto’s leadership has indicated that it has high expectations for business opportunities anticipated from its acquisition of 3M Cogent as well, but those will take time to be fully realized.
In its statement rebuffing Atos’ offer, Gemalto called its timing “opportunistic”, and asserted that Gemalto “is best positioned to grow successfully on a standalone basis and create long term value for its stakeholders, including its shareholders, through its ambitious strategy.” The company insisted that it “is well advanced in its transition from traditional banking and telecom smartcard markets to fast-growing Government, Enterprise & Cybersecurity and Machine-to-Machine markets”, and pointed to concerns about uncertainties in the proposed acquisition concerning things like regulatory considerations.
Gemalto added that “Atos’ Proposal is not reflective of a friendly and collaborative approach”, and thus “could exemplify cultural differences between the two companies.”
Nevertheless, Atos is pressing ahead with its offer, asserting that it “has received strong support from the financial markets, investors and the analyst community since [its] announcement.”