Greenlight Capital, a significant shareholder in Vitesco Technologies Group, is urging for a higher takeover bid from Schaeffler AG, or considering alternative actions such as selling Vitesco's powertrain-solutions business or spinning off its electrification solutions. The investment firm, which holds a 3.5% stake in Vitesco, views Schaeffler's current offer of 91 euros per share as undervaluing the company.
According to Greenlight Capital, a minimum valuation of EUR150 per share and an enterprise worth at least EUR6 billion would be more appropriate, in contrast to Schaeffler's EUR3.64 billion bid. In addition to pushing for a higher offer, the firm is also calling on Vitesco to publish an assessment of its fair value.
In response to these concerns, as well as those raised by other shareholders and employee representatives about the offered price and Vitesco's future prospects within a merged entity, an independent committee was formed by Vitesco on October 17.
The committee aims to address the concerns surrounding the proposed merger and ensure that the interests of all stakeholders are taken into account during the negotiation process.
InvestingPro Insights
Drawing upon real-time data from InvestingPro, Vitesco Technologies Group (VTSCn) has been demonstrating a promising financial trajectory. The revenue growth has been accelerating, and the company holds more cash than debt on its balance sheet. Furthermore, net income is expected to grow this year, which is a positive sign for investors. Despite this, the company has been suffering from weak gross profit margins and has not been profitable over the last twelve months.
The company's P/E Ratio stands at 164.25 as of Q1 2023, indicating a high valuation. The company's return on assets for the last twelve months as of Q1 2023 was 0.83%, which could be a point of consideration for potential investors.
InvestingPro Tips suggest that Vitesco's high return over the last year and trading near its 52-week high could indicate a strong performance trend. However, the company doesn't pay dividends to shareholders, which might be a factor for those seeking regular income from their investments.
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