Electrolux trims gains, sees media speculation on takeover as 'unfounded'

Investor AB

21/02/2023 12:16

(Adding reactions from companies, updates share move,
milestone)
    ** Shares in Electrolux  ELUXb.ST  trim gains, now up 3%,
with a trader pointing to an Italian media outlet hinting at a
possible acquisition offer from China's Midea  000333.SZ , a
report the Swedish company sees as groundless 
    ** Italy's Il Foglio on Monday said the speculation had
sparked an outrage among local unionists who demanded the
Swedish home appliance maker to quash speculations
    ** The trader said the speculation originated in a regional
Italian newspaper Friulisera
    ** Electrolux spokesperson Paul Palmstedt declined to
comment on what he called "unfounded speculations"
        ** Midea Group did not respond to Reuters' request for
comment
  
    ** Johan Eliason, analyst at Kepler Cheuvreux, who thinks
the shares are moving on the media speculation, says the report
is not backed by evidence
    ** "Midea has an ambition to generate more than 50% of their
revenues outside of China and in order to get there acquisitions
could be one path forward", the analyst says, adding at the same
time he hasn't seen anything "substantiating" in today's news 
    ** Eliason says he would not expect any deal at this point
although he doesn't rule out Electrolux' controlling shareholder
Investor AB  INVEb.ST  might one day be willing to divest the
business 
    ** Electrolux lacks "the same sort of technology edge, or
high profitability or strong market positions" that Investor
tends to prefer in its portfolio, he says
    ** But it's not a good time for sellers, Eliason points out
    ** Investor told Reuters it does not comment on rumours or
speculations surrounding any of the companies it invested in,
and would not do it at this time either
    ** Electrolux shares have lost over 40% of its value since
March 2021 highs
    ** The stock tops Stockholm blue chip index  .OMXS30 
despite paring earlier gains of as much as 6% 
 (Reporting by Greta Rosen Fondahn and Marie Mannes, additional
reporting by Sophie Yu, writing by Boleslaw Lasocki)
 ((boleslaw.lasocki@tr.com))