03 January 2006 23:11 [Source: ICIS news]
TORONTO (ICIS news)--Credit watchdog Standard & Poor’s (S&P) on Tuesday placed its ratings for BASF on credit watch with negative implication, citing BASF’s hostile offer for Engelhard and its plans to buy Degussa’s construction chemicals business.?xml:namespace>
Regarding the $5.2bn (Euro4.4bn) Engelhard bid, S&P cited the high and uncertain costs of the deal as well as integration risks. “S&P sees higher integration risks in a hostile, as opposed to a friendly bid,” it said. Together with its plans for the Degussa construction chemicals business, BASF’s liabilities could increase by more than Euro7bn, S&P said.
S&P also said it put its ratings for Engelhard on credit watch with positive implications, reflecting a likely improvement in the company’s credit quality if it is acquired by BASF.
Engelhard confirmed that it received BASF’s $37/share bid but asked shareholders to “take no action at this time.” The company's board will meet to review BASF's proposal and will make a recommendation to stockholders in due course, it said.
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