03 January 2006 22:20 [Source: ICIS news]
TORONTO (ICIS news)--Dow, DuPont and other US chemicals majors are not likely to launch a "white knight" offer to counter BASF's hostile bid for Engelhard, Bank of America (BoA) said on Tuesday.?xml:namespace>
In a research note to clients, BoA analysts said: "We question Dow's desire to expand in North America, and in catalysts for that matter given its recent divestiture of its interest in UOP." As for DuPont, BoA said: "[The] acquisition of Engelhard would be larger than the 'bolt-on' status of potential acquisitions endorsed by DuPont." PPG, which already has half of its sales exposed to the auto sector, might be interested but "Engelhard is perhaps a bit too large for PPG," BoA said.
BoA said Engelhard's auto catalysts business is the primary driver for BASF's bid because it is an attractive specialty business that overlaps with BASF's existing auto exposure in coating and engineering plastics.
The analysts added they do not expect to see a similar bid for US catalysts major Albemarle, mainly because the catalysts industry is already very consolidated. Also, Albemarle is closely held with an insider ownership of 25%, including a 18% stake held by the founding Gottwald family, BoA added.
Shares of Engelhard were up 26% at $38/share in late afternoon trading in New York. Albemarle was up 6.83% at $40.97/share.
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