Poland's ZAT gains only 10.3% of ZAP but pushes on with takeover

20 August 2012 13:21  [Source: ICIS news]

LONDON (ICIS)--Zaklady Azoty Tarnow (ZAT) is to push ahead with its takeover bid for Zaklady Azotowe Pulawy (ZAP) despite only picking up 10.3% of the fellow Polish chemical group following a cash offer for 32% held by various minority shareholders, it said on Monday.

ZAT intended to gain control of ZAP by using a share swap agreement, conducted at a rate of 2.5 ZAT shares per ZAP share, to acquire the 50.7% of ZAP held by Poland's treasury ministry, it added.

State-owned coal miner Kompania Weglowa was the only major stakeholder in ZAP to respond to ZAT's cash offer, in agreeing to sell its 9.9% stake at the offer price of zlotych (Zl) 110 ($33.33, €27.03)/share.

“We perceive the fact that ZAP's shareholders decided not to cash in their shares as a sign of confidence in the merger and the synergies involved, as well as higher expectations regarding the price offered,” WOOD & Company investment bank analyst Piotr Drozd said, in a note to investors on the result of ZAT's offer.

The treasury ministry is yet to respond to a call from the Workers' Council of ZAP for ministers to rearrange the new wave of consolidation of state-controlled assets in the Polish chemical industry so that ZAP takes over ZAT, rather than vice versa.

ZAP's management board is also yet to comment on whether it sees the ZAT takeover plan as the best way forward for the two companies.

Analysts say the “mega-merger” between ZAT and ZAP will create a “major league” Polish chemical player.

The treasury ministry has estimated that the combination of the two companies' fertilizer divisions will create the second largest fertilizer producer in Europe.

The ZAT group also produces caprolactam (capro), polyamide 6 (nylon 6), titanium dioxide (TiO2), oxo-alcohols and plasticisers. ZAP is also a producer of capro and melamine.

($1 = €0.81)
($1 = Zl 3.30, €1 = Zl 4.07)


By: Will Conroy
+44 20 8652 3214



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