Possible explanations of Ingenico SA's Dec. 19 rejection of an unsolicited, nonbinding offer are emerging.
The French point of sale terminal maker, which publicly acknowledged the $1.9 billion bid last week, said in a news release Sunday that the company making the offer "has not been in a position to submit a binding offer that could be accepted by the board."
Danaher Corp. of Washington reportedly was the unsuccessful bidder, though Danaher representatives did not respond to a request to confirm that report.
Market reaction to the rejection sent Ingenico's shares down 5.6% Monday, to $34.19 from Thursday's closing price of $36.21. Trading of Ingenico stock was halted Friday, Ingenico said.
The French government apparently also views Ingenico as a "strategic" company, according to a Reuters news report.
The report further said that Safran, a French defense firm that is partly owned by the French government and is Ingenico's largest shareholder, wanted a minority stake in the enterprise if it were sold.
That position may make it more difficult for a foreign company to buy Ingenico, analysts said.
"It doesn't seem like they outright rejected the offer," said Gil Luria, an analyst at Wedbush Securities. An acquisition of Ingenico "is not necessarily completely off the table."
Companies such as Danaher will continue to be drawn to companies like Ingenico because of the revenue potential they offer, Luria said.
Safran's involvement would be a significant factor in the rejection of the bid, said George Sutton, an analyst at Craig-Hallum Capital Group LLC, a Minneapolis investment research firm.
"The rejection of the bid, driven purely by Safran's insistence of a minority stake, smacks of the same state-based logic that unwound the Potash deal a couple of months ago," Sutton said. In November the Australian mining company BHP Billiton failed in its bid to buy Potash Corp. of Canada because of Canadian government opposition, Agence France-Presse reported.
Despite the failed bid, Ingenico and other payments firms have allure as targets, analysts said.
"As the industry consolidates, Ingenico's position becomes even more impressive to a third party," Sutton said. "Electronic payments continue to be a good macro growth area that any growth-minded industrial or technology company, a la Danaher, would find attractive."
Ingenico is strong in the high-growth payments industry, Luria said.
"Ingenico is the global leader, at least for another nine months," he said, alluding to the planned merger of VeriFone Systems Inc. and Hypercom Corp.
VeriFone said last month that is buying Hypercom in an all-stock deal valued at $485 million. The sale would close in the second half of 2011.
Conglomerates may find a combined VeriFone-Hypercom attractive, Luria said.
"Conglomerates want to diversify," he said. "This is one way to do it."
