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RTRS - BOMBARDIER HAS REJECTED OFFER FROM BEIJING INFRASTRUCTURE INVESTMENT TO BUY 60 TO 100 PCT OF BOMBARDIER TRANSPORT

Chinese company looking to acquire 60 to 100 pct of unit

Offer puts Bombardier's rail unit enterprise value at $7-8 bln

Bombardier unwilling to cede control of unit

By Benjamin Kang Lim and Matthew Miller

BEIJING, Sept 9 (Reuters) - Canada's Bombardier BBDb.TO has turned down a Chinese offer to buy up to 100 percent of its prized rail unit, documents seen by Reuters show, underscoring its reluctance to cede control of the unit to a state-owned Chinese buyer at this juncture.

Beijing Infrastructure Investment Co BEINF.UL (BII), a government-owned company that operates 18 metro lines in China's capital, has offered to acquire between 60 and 100 percent of Bombardier Transport, an Aug. 14 letter reviewed by Reuters outlining BII's offer showed.

Bombardier, which is looking to raise cash by listing a minority stake in its transport unit later this year, is attractive to Chinese players like BII, which, encouraged by the Chinese government, are seeking to acquire leading foreign technology to grow their businesses and global footprint.

Selling a majority stake would, however, expose Bombardier to political pressure in its home province of Quebec, where it generates high-paying jobs that could be lost through a takeover by a foreign buyer at a time when Canada's economy has slipped into recession.

In the letter addressed by BII Chairman Tian Zhenqing to Bombardier's Executive Chairman Pierre Beaudoin and not yet disclosed to the market, BII put the unit’s enterprise value – calculated as equity plus debt - at $7-8 billion.

But Bombardier's Vice President for Mergers and Acquisitions Louis Veronneau, who was copied in the non-binding offer, rejected the proposal in a letter to Tian one week later.

"We are not exploring a transaction involving a majority stake at this juncture," Veronneau wrote back on Aug. 21.

Excluding debt, analysts and bankers have pegged the equity value of the transportation division at about $5 billion. Much of the company’s value currently resides in its transportation business as its aerospace division has been hurt by delays and cost overruns tied to its C-Series line of commercial jets.

Bombardier shares have fallen 70 percent this year, and the company's market capitalisation sits at about $2 billion, well below the equity value of the transportation unit, reflecting the struggles at its aerospace business and heavy debt load.

"BII and BT (Bombardier Transport) will have an incomparable synergetic relationship, and the combination will create a globalized world-class rail industrial group running the whole industrial chain," Tian wrote, adding he would keep management teams intact.

Tian said BII planned to fund the acquisition with cash reserves and possibly debt. The letter also said BII had gained "strong support" to complete the transaction from Chinese authorities.

Contacted by Reuters, BII declined to comment.

"We are exploring initiatives such as potential participation in industry consolidation, but we will not discuss our activities in this regard or speculate on potential outcomes," Bombardier spokeswoman Isabelle Rondeau said in an emailed statement.

RELUCTANCE

Bombardier, which needs cash to grapple with cost overruns at its aircraft business, has received expressions of interest for its rail unit from several players including financial investors, sources with direct knowledge of the situation told Reuters.

One of those came from China's state-owned rail giant CRRC Corp Ltd 601766.SS 1766.HK, which also sought control, Reuters reported in April. (Full Story) CRRC said later that month it did not have plans to acquire rail assets from Bombardier. (Full Story)

Bombardier is open to the idea of a strategic partner but would rather avoid having to sell control of a key unit to a Chinese state-owned player, a source familiar with the company's thinking told Reuters.

Given the federal election being held in Canada this October, a majority sale would also be politically sensitive for Canadian regulators, who would have to approve the deal.

A deal with Chinese buyers would also be complicated by Chinese state regulations, including those on money leaving the country.

"M&A transactions are always complicated to begin with. And every time you do a deal with a Chinese investment group it comes with a lot of approvals from both sides of the Pacific," a source familiar with Bombardier's thinking told Reuters.

For the time being the company's baseline scenario remains that of listing a stake of between 20 and 30 percent in the unit in Frankfurt, a second person familiar with the situation said.

Selling a minority stake would allow Bombardier to make the argument that it is bringing in a new investor or partner while retaining control of the company.

"It makes a lot more sense, and it is a lot easier to sell politically," the first source said.

RTRS - BOMBARDIER HAS REJECTED OFFER FROM BEIJING INFRASTRUCTURE INVESTMENT TO BUY 60 TO 100 PCT OF BOMBARDIER TRANSPORT

Warren Buffett on Tuesday signaled that he would line up against Bank of America shareholders and two proxy advisory firms, and back a controversial bank move to have Moynihan keep both his chief executive officer and chairman titles.

“If I could vote, I would vote as management suggests, which is to have Brian take on the CEO and chairman job,” Buffett said during an interview on CNBC.

“He’s done a first-class job,” the 85-year-old Berkshire Hathaway CEO added.

The Charlotte, NC, bank last October gave Moynihan both titles — a move that was seen by many as dissing shareholders, who five years earlier voted to keep the posts separate.

The bank has maintained that it’s changed significantly since the 2009 shareholder vote, and splitting Moynihan’s dual role would hurt the bank during a period when it was finally starting to get back on its feet.

The BofA position fell mostly on deaf ears, and investors pressed to bring the matter to a head.

Under pressure, the bank this spring allowed the issue to come to a vote, scheduled for Sept. 22.

As of Sept. 4, two proxy advisory firms (Glass Lewis and ISS) and two major shareholders (California pension funds CalPERS and CalSTRS) came out against combining the posts.

As nay-saying shareholders appeared to be gaining momentum, Buffett joined the fray on Moynihan’s side.

But Buffett’s Berkshire Hathaway doesn’t own any BofA shares.

Berkshire does own warrants as part of a $5 billion investment that allows it to buy 700 million shares at $7.14 each — a position that Buffett has previously said he doesn’t plan on exercising until 2021, right before the warrants expire.

But even though he doesn’t own a direct stake, Buffett’s word is good on Wall Street.

The Nebraska billionaire has swooped in to give a boost to companies from Goldman Sachs to Harley Davidson — usually by providing financing when companies are in dire need of a Buffett seal of approval — and his cash.

In fact, the $5 billion investment in BofA, made in 2011, was a signal to Wall Street that he thought the bank was a good long-term bet.

BofA shares on Tuesday rose 3.2 percent, to $16.15. They are still down 9.7 percent on the year.

With the approval of the audit committee of the supervisory board, the

management board of RHÖN-KLINIKUM AG today resolved to make a public

repurchase offer pursuant to item 4 of the agenda of the annual general

meeting of 12 June 2014 for the repurchase of up to 7,108,824 shares

outside the stock exchange.

The offer price per share (excluding ancillary purchase costs) paid by the

Company amounts to EUR 25.54. The offer price includes a premium of 7% on

the reference stock quote of EUR 23.8733 which is the average stock market

price at the Frankfurt Stock Exchange on the last three trading days before

the publication of the Repurchase Offer.

- Chinese mkt to normalize, growing middle class to ensure growth in mid-, long-term

- European car market showing substantial recovery this year 

- Germany looking much better than anticipated at start of year.

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