26 April 2006 14:41 [Source: ICIS news]
HOUSTON (ICIS news)--Engelhard on Wednesday again rejected BASF’s hostile takeover bid and announced plans to purchase 26m shares or 20% of its stock at $45 (Euro36)/share.
The company earlier had rejected BASF’s $37/share offer as inadequate. Barry Perry, Engelhard chairman and chief executive, said the board determined that the stock buyback was the best way to improve value for shareholders.
He said the company will continue with a cost cutting programme estimated to save the company $15m/year beginning in 2007. “Our business strategy is just beginning to pay off as evidenced by the earnings momentum inherent in our results for the fourth quarter of 2005 and the extremely strong first-quarter earnings we announced separately today,” he said.
Engelhard posted a net profit of $69m for the first quarter of 2006 on Wednesday, up from $58m in the same period of 2005.
The company said the recapitalisation plan would be accretive to earnings per share (EPS) by about six cents in 2007 and should not interfere with the company’s ability to execute its business plan and realise growth opportunities.
The self-tender will begin the week of 1 May and expire at an undetermined date following the 2 June annual meeting. The company is expanding is board from six to nine members, and should stockholders elect a majority of pro-Engelhard directors, the stock buyback offer could be withdrawn.
Iselin, New Jersey-based Engelhard is a surface and materials science company.
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