Gemalto CEO reveals reasons for rejecting €4.3 bn offer from Altos

Gemalto at MWC eventDigital security company Gemalto has listed several reasons for rejecting the €4.3 billion cash offer from the €13 billion IT services company Altos.

“Gemalto, the world leader in digital security, is best positioned to grow successfully on a standalone basis and create long term value for its stakeholders, including its shareholders,” said Philippe Vallee, CEO of Gemalto.

Gemalto will be presenting development plan that will focus on the next generation of digital security for companies, governments and citizens worldwide.

Gemalto is in its transition phase from traditional banking and telecom smartcard markets to fast-growing Government, Enterprise & Cybersecurity and Machine-to-Machine markets. Gemalto said its share price does not reflect the transition and potential growth.

The implementation of Gemalto’s transition plan is already enabling the company to be more agile and nimble and better serve its clients’ needs. The Altos proposal is unclear on critical elements of the combination strategy, integration and potential consequences for its stakeholders.

The potential break-up contemplated by Atos through the contribution of Gemalto’s businesses to three separate divisions of Atos would negatively impact Gemalto’s performance and ability to serve its clients.

The proposed offer price represents a discount of 27.4 percent vs. Gemalto’s last 12-month high and a premium of 3.5 percent vs. Gemalto’s 12-month average share price. Altos made the proposal at a time when Gemalto has stabilised its performance following a challenging period.

The proposed offer price of €46 per share does not reflect Gemalto’s leadership positions in fast-growing segments, and is well below the valuation levels of companies involved in highly strategic Government and Cybersecurity activities.

Philippe Vallee said the Altos proposal does not adequately reflect a fair sharing of synergies accruing from the potential combination.

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