Teutonic suds

18 March 2003 By Rob Cox Follow @rob1cox

At 13.3 times ebitda, the price is steep. Synergy forecasts barely cover the E1.8bn premium to prebid speculation values. And P&G may need to spend more to bring preference shareholders on board before the deal is won.

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Procter & Gamble said it agreed to acquire the 77.6% of Wella held by descendants of the founder of the German haircare products maker. P&G will also bid for the rest of Wella's ordinary and preference shares, offering a total of E5.4bn in cash. It will also assume E1.1bn of Wella's debt.

P&G is offering E92.25 for each common share, or about E4bn in total; and E61.5 a preference share, for a total of E1.4bn.

The US consumer products group said expects to extract synergy benefits of E300m by the third year.

Wella has a 22% share of the global market for salon hai care products sales. In addition, the company markets perfumes and fragrances under a handful of brand names, including Gucci, Escada and Rochas.

Wella was advised by Greenhill. The families were advised by Lazard and Rothschild. Drueker & Co. advised P&G.

None of the bulge bracket banks advised on this deal. To read our view on the boutiques that did advise <a href="ve.asp?lid=1&sid=5953">click here</a>

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