STOCKHOLM (Reuters) - Swedish brake systems maker Haldex (ST:HLDX) said on Wednesday it would stand by its decision not to support a 5.53 billion crown (515.35 million pounds) bid from German rival Knorr-Bremse regardless of the outcome of a shareholders meeting this month.
The Haldex board pulled its endorsement for the Knorr-Bremse bid in June saying it was unlikely that competition authorities would approve the deal.
Knorr-Bremse, which first bid for Haldex 11 months ago, holds about 15 percent of its shares and has called an extraordinary general meeting (EGM) of the Swedish company, scheduled for Aug. 17.
The German company is proposing that the EGM instructs the Haldex board to recommend that the Swedish Securities Council approve an extension of the acceptance period for its bid until February 2018.
The board said should the EGM vote in favour of an extension, it would not be able to comply as that would contravene the Swedish Companies Act and its obligations to act in the best interest of shareholders.
"The very low probability of the deal being cleared cannot offset the material harm that would be caused," the Haldex board said in a statement on Wednesday.
It said an extension would reduce Haldex's value and "impair the possibility for the shareholders to either receive a new bid for the company or to benefit from the creation of long-term shareholder value on a standalone basis".
EU regulators said last month they would investigate the takeover offer as concessions offered by the German company were insufficient.