The Glasgow-headquartered firm said today that it had presented a fresh €4.6bn (£3.7bn) offer to Metso’s board last week, having seen an earlier approach rejected a month ago.
However, it told investors that its target “did not engage” with the overtures and rejected the planned tie-up on Tuesday, arguing that the proposal “significantly undervalues” the Helsinki-based firm.
As a result, Weir said it had no further plans “at this time” to pursue a merger, and a spokesman for the company admitted: “We’re moving on.”
The group, which revealed in April that it was seeking a tie-up with Metso, said its all-share merger plan valued the firm at €30.49 a share, a 34 per cent premium to its 26 March share price.
A deal would have seen Metso shareholders owning about 40 per cent of the combined group, which Weir said could have generated savings of at least £150 million a year. Metso, which is 11 per cent owned by Finnish state investment fund Solidium, is one of the key players in the market for rock-crushing machinery and analysts said it would have been a good fit for Weir, which is keen to expand its mining business.
The Finnish engineer employs 16,000 people and has a market value of £3.5bn, while its spurned suitor is worth almost £5.5bn and has 15,000 staff, including about 600 in Scotland.
Metso chairman Mikael Lilius said: “We have considered the approaches from Weir carefully and thoroughly. We have also carefully considered the opportunities that Metso has as an independent company and its strong growth prospects.
“Metso has a real opportunity to create significant value for all its shareholders by pursuing its own course and that the proposal from Weir significantly undervalues this opportunity and that a takeover by Weir at these conditions would not be in our shareholders’ best interests.”
Weir, led by chief executive Keith Cochrane, said it believed it had made a “compelling proposal, but remains financially disciplined and, therefore, does not intend to pursue this opportunity further at this time”.