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Investor AB may use Scania proceeds for purchases

Swedish Investment firm, Investor AB, said on Monday it could use proceeds from selling its Scania stake to fund acquisitions, ruling out a share buyback or special dividend payment.

Investor said earlier it was selling its entire stake in the Swedish truckmaker to Volkswagen for 200 Swedish krona ($32.56) per share, taking the German auto giant’s holding to 68.6% of voting rights and 37.73% of capital in Scania. The firm, the investment vehicle of Sweden’s powerful Wallenberg family, said the sale to VW would generate proceeds of 17.6 billion krona ($2.85 billion). But its top executive ruled out an extraordinary pay-out to shareholders or buying back its own stock. “We have looked at that and we have concluded that shareholders are better off with the return potential we see if we actually invest the capital, if you look five to 10 years out,” CEO Borje Ekholm told Reuters.

Investor has already teamed up with private equity group EQT to bid for Absolut Vodka maker Vin&Sprit, which Sweden’s center-right government is auctioning off in the country’s biggest ever privatization. Ekholm, who would not comment on Investor’s interest in Vin&Sprit, said the Stockholm-based firm would stick to its strategy of investing in its Nordic home market. “That’s where we really feel that our greatest strength is, so that’s where our priority will be,” he said on the sidelines of a news conference. “We will look for the opportunities around, and depending on what we see we’ll continue our disciplined approach to making investments.” Sharp recent declines in equity markets might set attractive prices for potential acquisitions, a spokesman said. “Clearly, in the turbulent market we have had lately we believe there will be interesting investment opportunities,” said Investor’s Fredrik Lindgren.

The firm has three main strategic investment aims – listed companies, operating investments, where Investor has a big enough stake to influence the firm, and private equity investments. “We have a clearly stated strategy to invest within our three core areas ... and we have a stated strategy to boost the share of unlisted assets,” Lindgren said. (Reuters)