6 days ago
Australian-owned Veridian wants to take over local rival Metro Performance Glass
Metro Performance Glass
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Supplied
The Australian owners of glass manufacturer Viridian have asked the Commerce Commission to approve a takeover of local rival Metro Performance Glass (MPG), even though no formal offer has been lodged.
The application unexpectedly emerged despite MPG having rejected approaches earlier in the year.
Australian private equity concern Crescent Capital, said neither company was strong and competition would not be reduced given there was ample alternative supplies of imported products.
"They need to merge to survive and continue offering secure glass supply to independent window fabricators and merchants," the application said.
It also said any attempt to raise prices or lower service levels would likely result in losing market share.
The Commission has issued a preliminary statement of issues, which it invited submissions on. Its criteria on such deals is whether it will substantially lessen competition.
Metro Performance Glass has repeated its rejection of Viridian's advances, as it looks to restructure and possibly raise new capital in the face of
significant losses in recent years
.
It did not comment on the application itself but said it was misleading in the way it described the local glass market and Metro's own position and outlook.
Crescent Capital has been pursuing MPG since last year, with an indicative offer of 8 cents a Metro share, compared to its recent traded price of 5 cents a share.
In February, it spurned an initial approach saying it was not in the interests of the company to consider or engage with Crescent any further.
"Directors consider the conditional proposal would be highly unlikely to proceed to an executable transaction for Metro shareholders."
It said there were many obstacles in the way of any deal and it doubted it would receive Commerce Commission approval.
