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- Healthcare product producer Asaleo Care (AHY) has turned down a $670 million offer to sell the company
- This was in response to an unsolicited offer in December from majority shareholder, Essity
- Essity is a Swedish hygiene product producer servicing the global market
- The board of Asaleo Care said the offer — at $1.26 per share — undervalued the company and was simply inadequate
- Asaleo also published a strong outlook for the next two financial years, aiming for high growth in earnings for 2022
- Asaleo shares are trading flat at $1.32
Healthcare product producer Asaleo Care (AHY) has turned down a $670 million offer to sell the company.
On Wednesday, the board of Asaleo declined the bid, saying it “fundamentally undervalues Asaleo Care and is materially inadequate”.
The takeover bid was launched in December last year by shareholder Essity — pricing Asaleo at $1.26 per share.
Asaleo has since elapsed such a price, influencing the board to reject the bid.
Although, Chairman Harry Boon did claim “the committee remains open to further engagement [from Essity]”.
Essity is a global healthcare product producer based in Sweden and the world’s second-largest producer of tissues. They hold 36.6 per cent of Asaleo, making them its largest shareholder.
After calling the bid “materially inadequate” on Wednesday, Asaleo put its money where its mouth was and published an upgrade in future profits.
The company says ongoing success during the 2020 financial year will only improve — where revenue has grown 2.3 per cent to $419.2 million.
For this period, Asaleo is targeting a 5 to 7 per cent boost in revenue and earnings of up to $93 million.
The following period, the company is looking to further those earnings by at least 10 per cent.
“Ongoing investment and innovation in our core brands, coupled with strong execution of our plan, enabled us to deliver continued revenue growth and market share gains across our core categories,” said Chief Executive Sid Takla.
“This has set Asaleo Care on a clear path towards sustainable future growth in 2021 and beyond”.
Also on Wednesday, Asaleo received the OK from the Australian Competition and Consumer Commission to acquire TOM Organic — a producer of tampons, pads, and liners.
Asaleo already produces such products, including the well-known Australian brand Libra.
Asaleo shares are trading flat at $1.32 at 10:32 am AEDT.
