03 January 2006 17:02 [Source: ICIS news]
HOUSTON (ICIS news)--BASF said on Tuesday it has made an all-cash proposal to buy all outstanding shares of common stock of US catalysis and surface finishing company Engelhard for $4.9bn (Euro4bn) or $37/share.
BASF said it has made efforts to negotiate a friendly transaction with Engelhard’s board of directors and management, but its efforts have been rebuffed.
By acquiring Engelhard, BASF said it would become a leading provider worldwide in the growing catalyst market. “Engelhard is an excellent enhancement for the BASF portfolio,” said BASF board chairman Jürgen Hambrecht.
The proposal represents a 23% premium above the 20 December closing price of Engelhard’s stock of $30.05 and a 30% premium over Engelhard’s 90-day average share price (VWAP) of $28.42 as of 20 December. This price also represents a premium to Engelhard’s 2005 year-end closing price of $30.15 and to the four-year-high closing price of $32.49 achieved on ?xml:namespace>
“We believe that our all-cash proposal provides a compelling opportunity to achieve significant value for Engelhard’s stockholders,” said Hambrecht. “We hope that Engelhard’s Board and management will recognise this opportunity as well as the benefits for Engelhard’s employees. We look forward to continuing and strengthening business relations with Engelhard’s customers.”
BASF said that its team is prepared to meet with the Engelhard team to see whether Engelhard can demonstrate value in addition to that discernible from the publicly available information that would allow BASF to increase the price that it proposes to pay for Engelhard by $1/share. Following Engelhard’s refusal to enter into a dialogue with BASF, BASF said it sent a letter on Tuesday to Engelhard’s Board of Directors outlining its proposal.
“Given your position, we see no alternative but to take our proposal directly to your stockholders,” BASF told the Engelhard board. BASF added: “Although we are being forced to take our proposal directly to your stockholders, it remains our strong preference to work with you towards a negotiated transaction.”
BASF said it expects to commence a tender offer for all of Engelhard’s shares of common stock shortly, which will be filed with the Securities and Exchange Commission (SEC) together with all relevant tender offer documentation.
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