MAN Roland Says Stock Trade Will Not Impede Its Growth in North
WESTMONT,IL--Recent trading activity by three institutions that owned a significant number of shares of MAN AG will have no adverse impact on the continued growth of MAN Roland Inc. in North America, the company announced today.
MAN AG is the Munich-based holding company that owns the MAN Group. That operational entity includes segment innovators in truck and bus manufacturing, engine production, construction engineering and printing presses. MAN Roland Inc. is the North American arm of the printing press division.
On January 11, three of MAN AG's largest shareholders relinquished their 24.2 percent stake in the company. Munich-based Allianz, Munich Re, and Frankfurt-based Commerzbank sold 35.6 million common shares to other institutional investors.
According to market analysts, MAN AG shares have been the second-best performers in Germany's benchmark DAX index over the past 24 months. The price of MAN shares has more than doubled during that period following a reorganization of the company's main divisions.
Allianz, Munich Re, and Commerzbank told analysts they were reducing their holdings in industrial companies to protect earnings from stock market swings. The three institutional investment groups held their interests in MAN through Regina Verwaltungsgesellschaft mbH. An Allianz spokesman indicted to reporters that his company would profit from the sale.
"This is the opposite of what happened to one of our competitors last spring," said Yves Rogivue, CEO of MAN Roland Inc. "Its shares had lost about half of their value over a two-year period. MAN AG stock has more than doubled over the same period."
The rapid growth in MAN AG's share price may have precipitated the recent action by Allianz and its partners. "Germany has amended its capital gains law," Rogivue explained. "They used to tax shareholders from taxes on book value increases. That law has changed a few years ago. Recent discussions by the German government have brought up the possibility to switch the tax law back to the old system."
Meanwhile the value of MAN AG stock remains stable. "Significantly, the per share price of MAN AG dropped only 41 cents on the day Regina Verwaltungsgesellschaft sold its interests, and the share price closed well above the low for this new year," Rogivue pointed out. "The following two days the price rose to more than offset the one-day loss."
German stock analysts, meanwhile, pointed out that the share transfer increases the percentage of the company that is freely traded. The result: MAN AG's place on the DAX is more secure. The plus here is mutual funds indexed to the DAX will be obligated to buy MAN AG shares in the near future.
The performance of the capital goods manufacturer also bodes well for its continued growth. MAN's third-quarter 2004 net income (the most recent period reported) more than doubled to 72 million euros.
