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Aker Board cautiously recommends STX takeover offer

Oslo: The Board of Aker Yards ASA (AKY) has released a statement in response to STX's mandatory offer in mid-July to acquire all issued shares in AKY at NOK 63 ($11.92) per share. STX had previously bought 39.2% of AKY in October 2007 and increased this amount above the 40% mark to 40.39% in June, thereby triggering the mandatory takeover offer.

The AKY Board notes that the STX offer contains 'no indications of forthcoming material changes to the Company's operations, employees or localization,' and that STX has stated that 'it will maintain AKY as a separate legal entity and the AKY group as a separate group within the the STX Group.'

Despite some reservations about STX's action - notably its agreement with the French government to sell off 34% of the share capital of AKY's French subsidiary without consultation with other shareholders - and in the absence of ony other offers, the Board therefore recommends shareholders to 'seriously consider' accepting the offer. The price may be below 'the long-tern value potential identified by the Board and management but can be considered as fair in today's market conditions,' it adds, a view back-up by a formal assessment carried out by J.P. Morgan.

Separately, AKY reported second quarter pre-tax profits of NOK72m, a result which was described as 'needing further improvement. Margins were again affected by penalties for late completion of offshore vessels, blamed on 'late and poor quality deliveries by sub suppliers.'  [08/08/08]

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