Polish workers' company set to rival Synthos bid for ZAP

20 June 2012 11:46  [Source: ICIS news]

rival bidLONDON (ICIS)--Spolka Pracownicza Chemia-Pulawy, a limited liability company controlled by the employees and union members of Polish chemical producer Zaklady Azotowe Pulawy (ZAP), is to file a counter-bid to synthetic rubber maker Synthos' offer for the firm, Chemia-Pulawy said on Wednesday.

The bid, to be made by 22 June, would be aimed at acquiring a controlling stake in ZAP through a “dividend model” – meaning that the holding would be paid for in annual tranches from dividends generated by ZAP over a 10-year period, it added.

The offer made by Synthos – a company owned by Polish billionaire Michal Solowow, which is Europe's second-largest synthetic rubber producer – comprises a bid for 100% of ZAP that would be worth up to zlotych (Zl) 1.96bn ($587m, €461m).

Spolka Pracownicza Chemia-Pulawy originally offered to buy control of ZAP – a major nitrogen fertilizer, caprolactam (capro) and melamine producer – during a privatisation process that was cancelled in January 2011 by the Polish treasury ministry, after it concluded that it would not receive a satisfactory offer from any bidder.

The worker/union entity might alter its offer this time around, perhaps by introducing an investor or some debt financing, according to Piotr Drozd, an analyst at Prague-based equities house Wood & Company.

“The fact remains that with Chemia Pulawy’s lack of capital, the likelihood of the treasury responding to this offer is close to zero, in our opinion,” he added.

The treasury ministry, which holds the key to ZAP's future through its 50.67% stake, has said it will give serious consideration to the offer from Synthos.

Drozd said Synthos may have embarked on a strategy to build one of Europe's biggest large-scale, diversified chemicals businesses by first acquiring ZAP and subsequently the second-largest European soda ash maker, Poland's Ciech.

Together, Synthos, ZAP and Ciech would have annual revenues of approximately Zl12bn, according to the companies' figures.

ZAP was not ready to comment on the possible Chemia Pulawy bid, but said it would make known its stance on the Synthos offer no later than two days before the start of the bid's share call, scheduled to run between 9 July and 7 August.

($1 = €0.79)

($1 = Zl3.35, €1 = Zl4.25)

By: Will Conroy
+44 20 8652 3214

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