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    STOCKHOLM, Sweden (Reuters) -- Truck maker Scania AB, fighting a 10.3 billion euro ($12.9 billion) bid from rival MAN AG, said on Monday it would be able pay an extra dividend of 35 crowns a share this year. Paying a special dividend, worth a total of up to 7 billion crowns ($949 million), makes it more attractive for shareholders to hold on to Scania shares and may force MAN to increase its 475-crown-per-share bid for a second time, analysts say. Scania shares rose more than 1 percent on the news, while MAN shares fell more than 2 percent, making the stock the worst performer in the German blue chip DAX index. "The suggested dividend is higher than we expected and in my view this is just another part in the defense against MAN," said Danske Bank analyst Henrik Breum. The prospect of an extra payout came after the Swedish company was put under further pressure at the weekend as Volkswagen -- Scania and MAN's biggest shareholder -- on Sunday gave cautious support for MAN's bid. "Following the completion of the previously announced capital structure review, management has concluded that the company has the ability to make a special distribution of up to 7 billion crowns, equivalent to 35 crowns per share, before the end of 2006," Scania said in a statement. Scania, which paid an unchanged dividend of 15 crowns for 2005, said its board would review the timing of a payment before the end of the year. Scania's liquid B shares rose 0.8 percent to 485 crowns by 0814 GMT and its A shares endowed with significantly more voting rights added 1.4 percent to 497 crowns. MAN shares fell 1.7 percent to 69.10 euros after touching 68.51. The dividend comments came as Scania reported robust third-quarter results, most details of which were released last week. Chief Executive Leif Ostling also said the market was underestimating the European truck market's growth prospects as new European Union members in eastern Europe draw more investment and consume more and as Russia's economy booms. He saw revenue rising around 10 percent between 2007 and 2009 and forecast an operating margin of 12-15 percent. Volkswagen said on Sunday it would sell MAN its 34-percent voting stake in Scania if MAN gets commitments of 71.31 percent of the share capital and at least 56.01 percent of the voting rights in Scania from other investors. MAN made a self-imposed threshold of 90-percent approval a condition to doing the deal. This means the influential Wallenberg family of Sweden would have to tender some of its shares for the deal to go through. The family controls just over 16 percent of Scania's stock capital and 29 percent of the votes through its investment vehicle Investor AB and a foundation. Scania's third-quarter figures confirmed those published early on Oct. 12, which showed Scania making an operating profit of a record 2.02 billion crowns. The Swedish firm, which reported an operating profit of 1.21 billion crowns in the year-earlier quarter, said it saw full-year 2006 operating profit substantially exceeding 8 billion crowns, with truck and bus deliveries of about 65,000 units. Copyright 2006 Reuters. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed. |
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