Pergo Cancels Witex Acquisition

Trelleborg, Sweden, May 27—Last week, Pergo put its acquisition of Witex on hold due to Witex’s weakened financial position. Today, Pergo indicated it has canceled the deal. Witex has announced that it will possibly suspend its scheduled loan payment. High debt and a difficult spring have contributed to Witex’s liquidity problems. Pergo currently owns 25.1% of the shares in Witex. Given the financial developments at Witex, the deal between Pergo and HW Industries regarding an acquisition of Witex will not take place. If it had gone through with the acquisition, Pergo indicated that its earnings would be adversely affected by costs connected to the process--slightly more than 20 million SEK. A possible write off of Witex shares owned by Pergo would also have a negative impact on Pergo’s earnings. The book value of the shares is 135 million SEK as of March 31.