16 May 2012 12:11 [Source: ICIS news]
LONDON (ICIS)--Russian mineral fertilizer producer Acron Group is offering to buy 66% of Poland's largest chemical group by revenue Zaklady Azoty Tarnow (ZAT), Acron said on Wednesday.
A source at nitrogen fertilizer, caprolactam (capro) and nylon 6 (polyamide 6) maker ZAT said the company's initial feeling was that the bid, priced at zlotych (Zl) 36 ($10.50, €8.24) a share, was "on the low side" even though Acron ownership might give the group access to "some of Russia's huge resources of cheap raw materials".
However, in a press release, Acron said the bid price represents a premium of 18.3% over ZAT's six-month average market price and 12.1% over the Warsaw Stock Exchange closing price on 15 May.
"We have today announced a tender offer for shares in ZAT, a leader in the Polish chemical market. Looking at the volatile economic climate and rising prices of raw materials, we believe that consolidation of assets is a means of maintaining the positive results and growth of both Acron and ZAT," said Vladimir Kantor, vice president of Acron Group.
"Acron Group has a great track record in international mergers and acquisitions. Through this transaction we want to expand the businesses of both groups. ZAT's manufacturing companies can become the basis for our operations within the European Union. At the same time, by further expanding the sales network, we want to bring Polish chemical products to markets around the world," he added.
Investors responding to the bid may tender their shares to Acron subsidiary Norica Holding between 6 June and 22 June, Acron added.
ZAT, which had 2011 revenues of Zl5.3 bn is controlled by voting at the board level by Poland's treasury ministry, which retains a 32.05% stake in the group.
Last year, having failed to find a strategic buyer for ZAT in a privatisation round, the treasury ministry permitted a consolidation of the group which saw it acquire majority shareholdings in two fellow state-controlled companies, nitrogen fertilizer and oxo-alcohols maker Zaklady Azotowe Kedzierzyn (ZAK) and mulit-component fertilizer and titanium dioxide (TiO2) producer Zaklady Chemiczne Police (ZChP).
The Polish state wants to exit the chemical sector before the end of 2013, despite several failed privatisations of major state-held assets in recent years.
Acron, which generated net profit of $692m in 2011 and revenue of $2.2bn, said it is one of Europe's 10 largest mineral fertilizer manufacturers, with assets in Russia, China, Estonia and Canada.
The group is listed on the London Stock Exchange and Moscow's MICEX-RTS, and is currently the largest private Russian investor in the Chinese market, it added.
With a product portfolio including 40 chemical products sold in 60 markets around the world, Acron owns substantial potash and phosphate reserves and has an ammonia production capacity of 1.7m tonnes/year.
($1 = €0.79)
($1 = Zl 3.43, €1 = Zl 4.37)
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