Celanese Q4 results could inhibit Blackstone bid opposition

03 March 2004 16:19  [Source: ICIS news]

LONDON (CNI)--The weak fourth quarter performance by German commodity chemicals producer Celanese could discourage its – mostly institutional – shareholders from contesting the Euro3.1bn ($3.9bn) takeover offer proposed by private equity group Blackstone, observers said.

On news of the bid in December 2003, the Celanese share price climbed to just under the Blackstone Euro32.50 per share proposal. Although the bid has been formally accepted by Celanese's management board, some investment funds were expected to hold out for more. The tender offer ends on 15 March.

But in what could be its last results published as a publicly-listed company, Celanese reported an operating loss of Euro9m for Q4 after an operating profit of Euro44m in corresponding quarter of 2002. It attributed the setback mainly to higher raw material costs, increased expense for stock appreciation rights and higher special charges.

Operating profit for full year 2003 declined 48% against 2002 to Euro106m on sales flat at Euro4.1 bn. Celanese said the same negative influences offset higher selling prices and higher volume sales, cost reductions and productivity improvements.

Another factor that could influence the Blackstone deal is the ongoing discussion about a possible re-location of subsidiary Ticona’s polyacetals plant at Kelsterbach, Germany. Plans by Frankfurt’s airport authority, backed by the state government, to locate a new runway with a flight path directly crossing the plant are worrying to Blackstone, an executive admitted.

Celanese values the property at around Euro1bn, but ‘will not give up the site voluntarily’, the group said in February. Kelsterbach is Ticona’s ‘most important’ plant in Europe and is ‘essential to its future’, said managing board member Andreas Pohlmann.

The German government’s standing commission on industrial accidents has declared the runway risks to be too high. Of  particular concern are the Ticona plant’s storage tanks for ethylene and methanol.

Both Celanese and BASF have declined to comment on reports that BASF has offered Ticona space at Ludwigshafen, Germany.

By: Dede Williams
+44 20 8652 3214

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