Shares in Manitou (MANP.PA) fall as much as 11 percent after the French maker of forklifts posts a drop in 2008 net profit and says its U.S. Gehl unit could file for Chapter 11 bankruptcy protection.
"Depreciation relating to Gehl reduces 2008 net profit to 4 million euros whereas the market was expecting 45-50 million and the lack of an agreement with banks relating to Gehl is weighing on the stock," Portzamparc analyst Aurelien Ripoche says.
Manitou can pursue further talks with its banks over Gehl or let it file for Chapter 11, Ripoche says, adding: "The best is to find an amicable solution."
Shares in the company are 3.1 percent lower at 4.70 euros by 0953 GMT ["Manitou Falls on U.S. Gehl Unit," Reuters Stock News Europe, 2009.04.01].
Manitou, which appears to have acquired Gehl at the worst possible time just last year, appears to be looking for a way out. This USAgNet report says Manitou might be acting like a homeowner whose mortgage is upside down and walking away from payments on an investment that's no longer worth the effort.
Can't blame the LAIC for that one... but if Manitou isn't just blowing smoke for some hardball negotiation strategy, we may have some serious economic redevelopment to do. Anyone care to buy Gehl back? Given that Manitou spent $331M on stock to gain control, even with stock values down, I think we're going to need a bigger kitty than Forward Madison has to pull that deal off. Ideas, anyone?