Spain's La Seda cancels €595m Interquisa deal

18 January 2008 20:35  [Source: ICIS news]

MADRID (ICIS news)--Spanish polyethylene terephthalate producer (PET) La Seda de Barcelona said on Friday that it will cancel its €595m ($875m) acquisition of purified terephthalic acid (PTA) producer Interquisa from Cepsa, following the turmoil in the world's capital markets.

La Seda said the global credit crisis, coupled with its plummeting share price, prompted the company's board to cancel the deal “indefinitely".

To finance the high-profile acquisition, which took months to hammer out, La Seda had planned to raise €500m in an equity offering and sell a 12-15% equity stake to Cepsa.

However, in late December, Spanish analysts warned that the share offering was larger than anticipated. In addition, the offering would dilute La Seda's market value because it included 217.5m new shares.

On 21 December, the day La Seda announced its plan to buy Interquisa, its shares fell by 8%.

On Friday, shares closed up 6% to €1.44. However, they are still are down 92% from a 12-month high of €2.77.

Analysts said La Seda would be wiser to integrate a slew of recent acquisitions to generate shareholder value before tapping the capital markets for more money.

In a statement issued on Friday, filed with stock market watchdog CNMV, La Seda said it would do just that.

“We are going to focus on integrating and strengthening the businesses we have acquired,” the company said.

Interquisa has a 580,000 tonne/year PTA factory and an 80,000 tonne/year isopropanol (IPA) plant in San Roque near Cadiz.

It also holds a 51% stake in Interquisa Canada, which runs a 520,000 tonne/year PTA production complex in Montreal.

Interquisa´s San Roque factory is  next to a PET unit owned by Artenius, a subsidiary of La Seda.

La Seda said the deal would have provided important raw-material synergies by combining PTA, IPA and PET sourcing, further expanding its strategy to become a global PET-making giant.

($1.00 = €0.68)

By: Ivan Castano Freeman
+44 20 8652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly