NOVA share target raised $13 amid M&A flurry

18 July 2007 17:07  [Source: ICIS news]

TORONTO (ICIS news)--Canada’s RBC Capital Markets on Wednesday raised its target price for the shares of NOVA Chemicals by $13, to $53, on increased likelihood that the company may be taken over.

 

Basell’s acquisition of Lyondell this week was fuelling further consolidation in the chemical industry, with Canada’s NOVA as one of the takeover prospects in North America, RBC said.

 

An analysis of the Lyondell deal and the price paid by Basell suggested a strategic buyer could value NOVA’s shares in the $50.00-$55.00 range, the analysts said.

 

A spokesperson for Calgary, Alberta-based NOVA could not immediately be reached for comment on Wednesday. NOVA had said previously it would not comment on such speculation.

 

NOVA has often been the target of takeover rumours, with analysts and press having linked it to India's Reliance and Saudi Arabia’s SABIC, among other companies.

 

In a separate note on Tuesday, HSBC said the Basell/Lyondell deal, and Hexion's acquisition of Huntsman last week, were set to bolster the valuations of some North American chemicals makers.

 

The London-based international bank cited NOVA, but also Westlake, the Houston-based olefins and vinyls maker.

 

NOVA's shares were priced at $40.48, up 2.12%, in Wednesday morning trading in New York, after rising almost 4% on Tuesday.

 

Westlake was priced $29.30, down 0.71%, after rising 8% on Tuesday.   

 

($1 =  €0.73)

By: Stefan Baumgarten
+1 713 525 2653

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