Modine Shares Gain 29% After Report of Possible Takeover Talks With Samsung
Key Facts
Modine shares rose 29% in extended trading on November 12 after a Bloomberg report said Samsung Electronics and Modine were discussing a possible takeover. Citing people familiar with the matter, Bloomberg said a deal could be reached in the coming weeks, but the talks had not reached a final decision. The report said negotiations could collapse or another buyer could emerge, making the deal a possibility under discussion rather than a completed agreement. Reuters was unable to immediately verify the report, and neither company issued an official confirmation. Modine shares closed regular trading at $106.10 before topping $135 in after-hours trading, in a session when the company had a market capitalization of about $5.6 billion.
Representatives of Samsung and Modine declined to comment on the talks, according to the Bloomberg report. The report said Modine shares had fallen about 15% since the company announced its quarterly results on November 3, before news of the negotiations drove the stock higher in after-hours trading on November 12. The results were for the fiscal second quarter ended September 30, when the company posted net sales of $994.4 million, an increase of $255.5 million, or 35%, from a year earlier. But net income was $30.3 million, down 32% year over year, and included $29.5 million in income tax expense related to a legal restructuring. The figures show a divergence between revenue growth and lower reported earnings as the company continues to reorganize its business.
Reported earnings per share for the quarter were $0.56, down 33% from a year earlier, while adjusted earnings per share reached $1.35, up 27%. Modine attributed the tax expense to a legal restructuring intended to facilitate the separation of its Performance Technologies unit. The company completed the unit's separation and merger with Gentherm through a Reverse Morris Trust transaction on October 1. Modine shareholders received 0.44619 Gentherm shares for each eligible Modine share, based on the separation record date of September 28. In the quarterly results, Chief Executive Neil D. Brinker said demand for the company's products “remains very strong,” pointing to record orders in the data center segment.
The performance of the data center segment underscores Modine's significance in the context of the possible talks: segment sales were $439.7 million in the quarter ended September 30, up 95% from a year earlier. The company said growth was driven by higher sales to hyperscale computing customers in North America. By contrast, the segment's gross margin fell 470 basis points year over year, pressured by higher costs for materials and components and by tariffs. Samsung shares in Seoul rose as much as 3.9% on Friday, November 13, before trimming their gains. The Bloomberg report cited an analyst at Bloomberg Intelligence as saying that buying Modine could help the group diversify, given its heavy reliance on its memory business.
Samsung has previous experience expanding its heating, ventilation and air-conditioning activities: in May 2025, it announced an agreement to buy all of FläktGroup's shares for 1.5 billion euros, then announced the completion of the acquisition in November 2025. Modine expects fiscal 2027 net sales of between $3.1 billion and $3.2 billion and adjusted EBITDA of between $470 million and $500 million, excluding Performance Technologies from the comparable periods. The company scheduled an investor and analyst day for November 18 to present its long-term revenue and earnings targets. The event comes as the possible takeover talks remain without a final decision, according to the report cited from Bloomberg. In the meantime, the financial outlook and the company's long-term plan remain among the next announced milestones for investors.