Klöckner & Co Shares Trade at a Premium to Acquisition Bid

Klöckner & Co's share trades 9% above the €11 takeover bid as investors bet on higher compensation after strong operational turnaround and EBITDA growth.

The market is delivering a clear verdict on the takeover of Klöckner & Co by Worthington Steel. Despite the formal closure of the offer period, Klöckner's share price has surged to a three-year high, trading approximately 9% above the cash bid of €11.00 per share. This premium suggests investors are reassessing the steel distributor's prospects following its ongoing corporate transformation.

Operational Improvements Underpin Market Sentiment

Recent financial performance has provided fundamental support for the share price movement. For the 2025 fiscal year, Klöckner & Co raised its EBITDA before special items to €171 million, a significant increase from €136 million the previous year. Although group revenue saw a slight decline to €6.4 billion, the net result improved markedly to -€53 million, compared to -€176 million a year earlier.

This turnaround is largely attributed to a strategic pivot toward higher-margin service center operations in North America. The company has divested eight US distribution sites and its Brazil business. Capital from these sales is being reinvested, including into a new aluminum flat-rolling mill in Mississippi.

Takeover Threshold Crossed, But Shareholders Hold Out

Worthington Steel confirmed the successful conclusion of the extended acceptance period late Friday. By March 26, 2026, the bidder had received tenders for 49.44% of Klöckner shares. Combined with its existing holdings, Worthington Steel will control about 58.78% of voting rights upon settlement, comfortably exceeding the minimum acceptance threshold of 57.5%.

The market's response pushed the share price to €12.10. Shareholders who declined the offer appear to be speculating on a higher compensation payment. This payment will be determined as part of a planned domination and profit transfer agreement, the value of which will be set following a pending business valuation.

Outlook for Remaining Minority Investors

Looking ahead, management anticipates EBITDA before special items for the first quarter of 2026 to land between €20 million and €60 million. This wide range reflects the persistent uncertainty within the steel market. The next critical event is a shareholder meeting, which must approve the domination agreement. Worthington Steel expects to command the necessary majority vote.

For investors who rejected the takeover bid, the focus now shifts to the statutory compensation. The basis for valuing this compensation is likely to become a point of significant interest, given the company's recently strengthened operational fundamentals.