Shares of Velan (Velan Stock Quote, Chart, News, Analysts, Financials TSX:VLN) have fallen in half after the French government moved to block the acquisition of the company’s French units by would-be suitor Flowserve, which in February had agreed to buy the company for (C) $329-million.
Shares of the Quebec-based maker of industrial steel valves were down by more than fifty per cent Friday after the resumption of trading following a halt.
On October 5, Velan announced that it was informed by would-be suitor Flowserve that the latter would no longer be pursuing the acquisition of the former, owning to regulatory changes coming from French authorities, who have determined that Valen is crucial to its nuclear industries.
“We thank our employees and other stakeholders who supported the proposed transaction. Although we are disappointed with the outcome and the decision of the French regulators, we remain confident in the future of Velan’s business. We will now turn our entire focus to the operation of a successful business while continuing to assess all strategic options available to the company to create value for all of our stakeholders,” said Velan chairman James Mannebach.
“After months of deliberations, France decided to oppose the purchase of Velan SAS and Segault SAS by the Texas-based company because of their strategic importance to the French nuclear and defense industries, an official at the finance ministry said. Late Thursday, the management of Velan said Flowserve was ending the merger pact in the light of the French refusal,” Bloomberg’s Ania Nussbaum reported.
At press time, shares of VLN were down 50.9 per cent to $5.41.
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