French group Sonepar said it intends to make a 2.5 billion euros ($3.5 billion) cash offer for Dutch electrical parts distributor Hagemeyer NV, but investors speculated on a higher bid and its shares soared, according to Reuters.
The proposed offer values Hagemeyer at 4.25 euros per share, but Hagemeyer shares jumped more than 6 percent to 4.41 euros on Tuesday, giving it a market capitalization of about 2.6 billion euros, according to Reuters data.
SNS Securities analyst Martijn den Drijver said Hagemeyer would probably not accept the bid immediately and might try to obtain a higher price, but he did not see a competing offer.
"Their position is not one of strength. We therefore think that the bid has a high likelihood of being successful," he said.
Hagemeyer confirmed it had been informed of the intended bid by Sonepar, but said that until Monday evening there had been no contact with Sonepar about its offer.
Investors have been speculating about a bid for Hagemeyer as the shares have increased over 50 percent since Sept. 25. Analysts had suggested that French peer Rexel was interested in the company.
Hagemeyer distributes electrical materials and safety and other maintenance, repair and operations products to electrical contractors in the construction and installation business and industrial users.
The company and its peers such as Rexel have been suffering revenue declines in the United States due to an uncertain outlook and declining housing spending.
Hagemeyer's chief executive Rudi de Becker said in June he would step down in April next year.
Sonepar, which is family owned and founded in 1969 by former airforce officer Henri Coisne, is also a provider to the electrical industry. Its turnover reached 9.45 billion euros in 2006.