Low tension

12 November 2007 By Pierre Briancon

The French electricalparts distributor s bid for Hagemeyer has turned friendly after it sweetened its offer. With its own shares down 12% since its April IPO, Rexel should use the opportunity to focus on valuecreating growth.

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Rexel, the French electricalparts distributor, and its Dutch rival Hagemeyer, on Monday said they has entered exclusive negotiations aimed at finalising an agreement by which Rexel would make an allcash, E4.85ashare offer for its smaller competitor.

In late October, the board of Hagemeyer had rejected an initial E4.6ashare Rexel offer as too low. The Dutch company was thrown into play last month when privatelyowned Sonepar, another French company, had offered to buy it for E4.25 a share. Sonepar in the meantime built up a 10.5% stake in Hagemeyer.

Rexel plans to carve up Hagemeyer and sell back to Sonepar assets accounting for about 40% of Hagemeyer's revenues.

Rexel shares closed up 2.7% Monday.

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