Another potential hurdle has arisen in Canon's proposed acquisition of Océ, after Océ shareholder Hermes Focus Funds voiced its opposition to Canon's "meagre" bid.
The news came as the Dutch digital press vendor posted a €23m (AU$36m) fourth-quarter loss, with company chairman Rokus van Iperen (pictured) forecasting that the digital printer sales market would " remain challenging" in 2010.
In an open letter to the Canon and Océ boards, Hermes said it would not sell its 3.3% stake in Océ to Canon, saying that Canon's €8.60 per share bid for Océ wasn't enough.
"We recognise that the 70% premium offered on Océ's shares as at the announcement of the indicative bid might appear impressive when considered in isolation," said Hermes.
"The indicative bid is, however, a meagre representation of the true value of Océ, when profitability potential and the depressed share price are put into a proper perspective."
"Following integration with Canon, and with profitability in line with industry standards, the company's equity would indicatively be worth some 75% more than the offer price," the company added.
Hermes only holds a 3.3% stake in Océ, so its stance is unlikely to derail the acquisition. However, it adds to existing pressure on Canon to raise the bid - last year, 10% stakeholder Orbis voiced its own opposition to the deal.
Orbis said in November that it would not sell its stake to Canon at the current price, saying the bid "significantly undervalues" the company.
Both claims could be seen as at odds with Océ's negative Q4 results. Net loss for the quarter was €23m, compared to a €1m profit in Q4 2008.
Total revenues during the quarter amounted to €683m, equivalent to a 15% year-on-year decrease.
Digital colour press sales in its revenues did jump to 34% share of its revenue, up from 28% in Q4 2008.
Yet its Wide-Format Printing Services division experienced a decline related to the deterioration in the construction and manufacturing market sectors, with revenues coming in at €187m, a decline of 17%.
Van Iperen said: "Our revenues continued to decline in the fourth quarter as customers remained uncertain about the economic situation and sustained their efforts to reduce costs.
"In 2010, we anticipate that the markets will remain challenging. In order to further strengthen our competitive position and drive sales under difficult market conditions, we will continue to introduce innovative products."
Concerning the year ahead, Océ stated that it would remain focused on cost-cutting and balance sheet reduction programmes while working with Canon "to create the best combination in the printing industry".
Océ shares have continued to trade at Canon's offer price of €8.60 a share overnight, indicating that the market is anticipating a successful resolution to the deal.
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