Orbis Portfolio Management said on Wednesday it would not tender its 10-percent shareholding in copier and printer maker Oce to Canon Inc, saying its 730 million-euro ($1.1 billion) bid significantly underpriced the Dutch company.
The Japanese camera and office equipment maker on Monday offered 8.6 euros for each Oce share, a 70 percent premium to the previous trading day's close, in a move to strengthen its product line-up and sales channels.
As a result of a flawed negotiation process ... Oce's assets are being significantly undervalued at the proposed buyout price, Orbis Portfolio Management (Europe), a manager and adviser to Orbis Funds, said in a statement distributed by its public relations agent FD.
Orbis said Oce management has admitted that it had not invited Konica Minolta, which has a cross-selling agreement with Oce, to bid for all or part of the company.
Orbis Funds would not wish to tender their approximate 10 percent holding at the current offer price, the statement said.
Oce shares were up 1.5 percent at 8.70 euros by 1240 GMT, slightly above the Canon offer, fueled by hopes of a higher bid or a counter bid.
But Oce rejected the claim that they had not talked to Konica Minolta or that negotiations were otherwise flawed.
Oce has been in frequent contact with all relevant industry players, and has considered and discussed various transaction forms, all in the best interest of its shareholders and other stakeholders, the company said in a statement.
For its part, Konica Minolta said it was not interested in entering a bidding war.
We have no intention at the moment of offering a counterbid, a spokesman said, adding that the company planned to sit down with Oce and talk about the partnership.
Most analysts said on Monday that the bid price was good for Oce shareholders, though some did not rule out a rival offer, possibly from Hewlett-Packard, Kyocera, Xerox, Toshiba Corp or Konica Minolta.
Canon's offer for Oce comes a little over a year after Japanese rival Ricoh, the world's largest copier maker, bought U.S. office equipment distributor Ikon Office Solutions, dealing a blow to Canon, which provided 60 percent of the products Ikon handled.
Canon, which derived 65 percent of its 2008 sales from printers and copiers, and Oce and other rivals have suffered from the economic slump, which has forced companies to cut office costs.
Oce, loss-making in the past two quarters, has been cutting costs and staff and paid no final dividend in 2008.
(Reporting by Kiyoshi Takenaka in Tokio and Harro ten Wolde in Amsterdam; Editing by Joseph Radford and David Cowell)