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Elliott Management said late last month that it
had raised its stake in Axis to 10.91 percent. While it did not
state its intention, the move put pressure on Canon to sweeten
its 23.6 billion crown ($2.8 billion) takeover offer.
The terms of the deal allow Canon to back out if it cannot
acquire more than 90 percent of Axis shares. Elliott's stake
effectively ruled out a standard squeeze-out procedure in which
Canon, once it owns more than 90 percent of Axis shares, could
forcibly acquire the rest.
But sources familiar with the matter said Canon wants to go
ahead and buy what it can from shareholders who agree to its
original offer of 340 crowns per share, a premium of nearly 50
percent to their closing price ahead of the announcement.
It could later negotiate a higher offer with Elliott, but
Swedish M&A law restricts bidders from offering a higher price
for around six months without also paying more to shareholders
who accepted the original offer.
The sources said Canon was happy to start out with a stake of
less than 90 percent and take time in negotiating a full
takeover.
Canon's move to fully acquire Dutch print machinery maker Oce,
announced in 2009, met a challenge from Orbis Portfolio
Management and was only completed in 2012 after a squeeze-out.
Canon said it could not yet comment, although it is expected to
announce soon how many shareholders took up its offer during the
March 3-April 1 acceptance period. Elliott has declined to
comment on its plans.
(Reporting by Ritsuko Ando and Emi Emoto; Editing by Hugh
Lawson)
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