Siemens shareholders reject sale of low-voltage biz, stock hits new high

livemint.com:

Siemens Ltd stock rose 4.5% on the National Stock Exchange in Monday’s early trade to touch a new 52-week high of ₹4,068.85. This positive reaction comes after most of its minority shareholders voted against selling its low-voltage motors and geared motors business to Siemens Large Drives India, a subsidiary of Siemens AG. Analysts point out that the proposal was not lucrative for minority shareholders.

According to a Jefferies India report, the proposed EV/sales was lower than the traded multiple of the India arm. EV is enterprise value. “Implied loss to shareholders was Rs189/share as the proposed sale value was at an EV/sales of 2.1 times versus company multiple of 8.4 times," it said on 30 July.

In May, the company's board of directors had authorized the sale and transfer of this businesses, along with related customer service operations, to Siemens Large Drives India. The deal was valued at ₹2,200 crore. This transaction was subject to necessary approvals by shareholders and regulatory authorities.

In a report dated 28 May, analysts at Nomura Financial Advisory and Securities (India) Pvt Ltd had said that they do not expect minority shareholders to approve the deal. “The deal implies price to sales of ~2x FY22 sales of Rs1060 crore versus around 7 times for overall Siemens. Further, LV motors Ebit margin at 12.5% is higher than comparable Digital Industries margin of around 10% for FY22.