Japan's Canon Inc - multinational corporation specialized in the manufacture of imaging and optical products- is unlikely to raise its offer for Swedish surveillance camera maker Axis AB for now but won't back out of the deal either, despite pressure from hedge fund Elliott Management, sources said on Monday. Elliott Management said late last month that it had raised its stake in Axis to 10.91 percent. While it did not state its intention, the move put pressure on Canon to sweeten its 23.6 billion crown ($2.8 billion) takeover offer. The terms of the deal allow Canon to back out if it cannot acquire more than 90 percent of Axis shares. Elliott's stake effectively ruled out a standard squeeze-out procedure in which Canon, once it owns more than 90 percent of Axis shares, could forcibly acquire the rest. But sources familiar with the matter said Canon wants to go ahead and buy what it can from shareholders who agree to its original offer of 340 crowns per share, a premium of nearly 50 percent to their closing price ahead of the announcement. It could later negotiate a higher offer with Elliott, but Swedish M&A law restricts bidders from offering a higher price for around six months without also paying more to shareholders who accepted the original offer. The sources said Canon was happy to start out with a stake of less than 90 percent and take time in negotiating a full takeover. Canon's move to fully acquire Dutch print machinery maker Oce, announced in 2009, met a challenge from Orbis Portfolio Management and was only completed in 2012 after a squeeze-out. Canon said it could not yet comment, although it is expected to announce soon how many shareholders took up its offer during the March 3-April 1 acceptance period. Elliott has declined to comment on its plans. Source: Reuters
