Akzo Nobel declines comment on Organon takeover

15 January 2007 15:50  [Source: ICIS news]

LONDON (ICIS news)--Akzo Nobel on Monday declined to comment on potential takeover offers for its Organon business from private equity firms worth more than €8bn ($10.3bn), while analysts said this could still be a possibility.

In media reports on Friday (12 January), three firms were mentioned as possible buyers of the Dutch company’s pharmaceuticals division; Carlyle Group and Cinven; the Blackstone Group; and a group including Kohlberg Kravis Roberts & Co.   

However, an Akzo Nobel spokeswoman said no deadline had been set by the company for preliminary offers for the business unit, as suggested by several media reports.

Akzo Nobel has always stated that an initial public offering (IPO) in early 2007 would be its preferred option.

One analyst said an IPO was still the most probable outcome, but that there was no doubt private equity companies would be interested in making an offer.

The question was whether a private equity company would be able to make an interesting offer for the business, which would please the Akzo Nobel board, given that they would not be allowed to perform due diligence on the business, he added.

“With these limitations, it will be difficult to make an offer,” the analyst said, but added that a takeover by private equity would still be possible through the IPO process.

It would also depend on how much the company needed the cash, as a potential acquisition of UK paints and coatings firm ICI was still on the cards, another analyst said.   

The approximate 13% rise in ICI’s share price over the past month since rumours of a possible bid from Akzo started circulating would make it increasingly difficult for the Dutch firm to make an offer with any upside on synergies.

ICI’s share price was at 479 pence at 15:08 GMT on Monday, up 0.42% from the previous close.

Akzo Nobel’s share price stood at €49.15 at 15:15 GMT, up 0.84% from the previous close.

($1 = €0.77)

By: Hilde Ovrebekk
+44 20 8652 3214

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