French Arkema’s shares surge amid takeover reports

06 July 2012 12:51  [Source: ICIS news]

LONDON (ICIS)--Shares in Arkema soared on Friday amid market reports that the French specialty chemical company has become a takeover target following the divestment of its maligned vinyl products segment.

At 11:08, Arkema's shares on the Paris stock exchange were trading at €60.49 ($74.68), up 13.02% from the previous close. Arkema spokesman Gilles Galinier said the company will not comment on market speculation.

The surge in the share price followed an article by UK newspaper the Financial Times, published on Friday, which said Arkema is "understood to have received multiple takeover approaches, valuing the business at €5.5bn or more", citing sources. The article also named US-based DuPont and Germany-based BASF as possible suitors.

Arkema on Tuesday finalised the divestment of its vinyl products segment to Switzerland-based Klesch Group so it can focus on its industrial chemicals and performance products segments. The vinyl products activities have been grouped within a new company called KEM ONE, which is headquartered in Lyon, France.

At the time, Thierry Le Henaff, chairman and CEO of Arkema, said the divestment was consistent with Arkema’s strategy to refocus its business on specialty product lines.

In November, Arkema said its vinyl business was no longer profitable and that it will pay the Klesch Group €100m to take over the segment. It would also book exceptional net expenses of around €470m for the project.

At the time, investment bank JP Morgan Cazenove had said a key depressant on the valuation of Arkema since its 2006 spin-off from energy major Total had been its large vinyls division, with barely any profits and the constant threat of a move into losses.

The bank had also said that by announcing the planned disposal, Arkema had removed a major negative influence on its valuation.

($1 = €0.81)

Additional reporting by Joey Lau

By: Franco Capaldo
+44 (0)20 8652 3214

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