Synthos in €461m bid for fellow Polish chemical producer ZAP

18 June 2012 11:22  [Source: ICIS news]

LONDON (ICIS)--Synthetic rubber producer Synthos has launched a bid to buy 100% of fellow Polish chemical company Zaklady Azotowe Pulawy (ZAP) for up to zlotych (Zl) 1.96bn ($587m, €461m), Synthos said on Monday.

Shareholders that accepted the purchase offer on 9–20 July would be paid Zl102.5 per share, while Zl98.77 would be on offer for any shares sold before the expiry of the bid on 7 August, Synthos added in a stock market regulatory filing.

The Polish treasury ministry owns 50.67% of ZAP, a nitrogen fertilizer, caprolactam (capro) and melamine producer.

The ZAP closing share price on the Warsaw Stock Exchange on Friday was Zl102.30.

With grain prices falling, Synthos said in a press release: “[Synthos] believes the proposed share call price is attractive for existing shareholders, particularly given the inevitable reduction in margins on sales made by ZAP over the coming quarters and years, especially in the field of fertilizers.”

Synthos, Europe's second-largest producer of synthetic rubber, has signed a credit agreement worth up to Zl2bn with Polish bank PKO Bank Polski to finance the acquisition of ZAP, the company said.

The company, owned by Polish billionaire Michal Solowow, became part of the Polish blue chip WIG20 index in February.

Analysts noted Synthos, based in Oswiecim, southern Poland, had enjoyed huge profits in the previous two years on an extended bull run in synthetic rubber, driven by demand in emerging markets.

Synthos’ offer for ZAP – which raised most of its plants in Pulawy, central-eastern Poland – is the second bid to have been made for one of the remaining major chemical companies controlled by the Polish state.

In May, Russia's Acron Group, a mineral fertilizer producer, announced a bid for a controlling stake in Poland's largest chemical group, Zaklady Azoty Tarnow (ZAT).

ZAT has stated it is strongly against the offer and last Friday put in place a ‘poison pill’ defence against it.

As part of its latest plan to raise proceeds from privatisation, the Polish government has said it wants to exit the Polish chemical sector by the end of 2013 at the latest.

($1 = €0.79)

($1 = Zl3.34, €1 = Zl4.25)

By: Will Conroy
+44 20 8652 3214

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