(Adds RuggedCom’s comments, details; Updates share)
* Belden offers C$22 per RuggedCom share, premium of 62 pct
* RuggedCom says has got no formal offer
* RuggedCom could solicit other proposals
* Ruggedcom shares soar as much as 73 pct
By Aftab Ahmed
Dec 19 (Reuters) - Cable manufacturer Belden Inc made an unsolicited offer to buy smaller rival RuggedCom Inc for about C$280 million in cash to beef up its networking business.
RuggedCom, which serves the electric power, transportation systems, military applications and industrial processes markets, said it has not received a formal offer from Belden.
A special committee formed by the RuggedCom, which counts original equipment makers General Electric Co, and ABB among its customers, to evaluate Belden’s offer and solicit other proposals, called the offer “opportunistic.”
Shares of the Ontario-based company on Monday morning were trading 67 cents above Belden’s C$22 a share offer, that represented a 62 percent premium to RuggedCom’s Friday close of C$13.61 on the Toronto Stock Exchange.
Earlier in the session, they jumped 73 percent to $23.52.
“I think the market is telling you that the company and its investors are gonna want a bit of a more premium,” Paradigm Capital Inc analyst Spencer Churchill said.
RuggedCom has been seen as an attractive buy for bigger players like Cisco Systems Inc, Siemens AG, ABB and GE, who have been scouting the globe for expertise and technology in the smart grid growth market.
“It makes sense for Siemens and ABB to bid for the company... But the more likely scenario is that Belden increases its bid,” said Churchill, who expects Belden to raise the offer above C$24 a share.
RuggedCom’s suite of products, from routers to ethernet cables, support integrated communication and power system infrastructure -- allowing for robust two-way communication, advanced sensors and distributed computers, all essential elements of a smart grid network.
Belden, which entered the industry in a significant way in early 2007 with the acquisition of Hirschmann for $258 million, has been looking for preys in the smart grid space and had bought GarrettCom for about $52 million last year.
Shares of the company were down 2 percent at $31.56 on Monday on the New York Stock Exchange. (Reporting by Aftab Ahmed in Bangalore; Editing by Joyjeet Das)