July 19 (Reuters) - SPX Flow rejected Ingersoll Rand's sweetened $3.59 billion takeover offer on Monday that the U.S. industrial equipment maker had proposed to strengthen its foothold in the food and beverage industry.
Shares of SPX, which makes components for machinery used by food-and-beverage and industrial companies, closed about 23% higher at $75.93. Ingersoll's shares had fallen about 4% amid a broader market decline.
SPX said Ingersoll's proposal undervalued the company and it believes the successful execution of its strategic plan will deliver greater value to shareholders.
A deal with SPX Flow would substantially expand Ingersoll's presence in the food and beverage industry, Barclays analysts said in a note, adding there was scope for significant cost savings from the merger.
SPX Flow garnered 47% of its 2019 sales from the food and beverage market, while one of Ingersoll's units recorded 5% of its revenue from the segment.
"While we had hoped to complete a transaction privately, we remain committed to engaging with SPX Flow on a friendly basis and in a constructive and collaborative manner," Ingersoll Rand Chief Executive Officer Vicente Reynal said in a statement, confirming SPX's refusal.
Reuters on Sunday, citing sources, reported SPX Flow had rebuffed takeover approaches from Ingersoll Rand.
Ingersoll first offered to buy SPX Flow in May for $81.50 per share, before sweetening the offer in June to $85 per share, which represents a premium of about 37% to SPX Flow's closing price on Friday.
(Reporting by Ankit Ajmera in Bengaluru; Editing by Shinjini Ganguli and Krishna Chandra Eluri)
