Italy watchdog close to decision on Ansaldo STS bid price

By Giuseppe Fonte and Stephen Jewkes

ROME/MILAN (Reuters) - Italy's market regulator Consob expects to reach a decision very soon on whether a price set by Japan's Hitachi to buy out minority shareholders in Ansaldo STS (STS.MI) should be raised, the watchdog's head said on Monday.

Hitachi launched a 9.5 euro-per-share mandatory public tender offer on the Italian train signalling company's minorities on Jan. 4 after buying 40 percent of the company from defence group Finmeccanica (SIFI.MI) last year at the same price.

But activist investors Amber Capital and Bluebell Partners have asked Consob to rule on whether Hitachi should raise its bid, claiming the price paid to state-controlled Finmeccanica was kept artificially low by overvaluing another asset involved in the deal.

Ansaldo STS said in December its board had failed to reach a majority on a fairness evaluation of the price of 9.50 euros.

"The timeframe will be fast," Consob president Giuseppe Vegas said on the sidelines of a conference. "I think we'll take a decision before the end of the (bid) process under way."

Shares in Ansaldo STS have stayed firmly above the price of the Hitachi bid which is due to end on Feb. 5, as investors tread water ahead of the Consob ruling.

The shares closed on Monday at 9.78 euros and the offer had attracted just 2.9 percent of the capital targeted.

Italy has a poor track record of treating small shareholders with critics saying regulators have lacked teeth and resources to offer proper protection from arcane governance rules.

Consob's decision on Ansaldo STS is seen as a big test of whether things are changing under Prime Minister Matteo Renzi who is eager to attract foreign investments.

Hitachi bought its 40 percent stake in Ansaldo STS last year in a 790 million euro deal that also included Finmeccanica's loss-making rolling stock division AnsaldoBreda.

When the deal was agreed other acquisition targets in the signalling industry, Faiveley (FAIP.PA) and Invensys, were valued at higher multiples.

Last year RBC Capital Markets, adviser for Ansaldo STS independent board members, judged the offer not fair while Bank of America Merrill Lynch, advising the Ansaldo STS board, judged it fair.

(Editing by David Evans)