40 North submits merger agreement after upped WR Grace takeover bid

Author: Janet Miranda

2021/04/06

HOUSTON (ICIS)--40 North has submitted a merger agreement mark-up after it increased its takeover offer for WR Grace to $70 per share up from $65 per share.

The company added that with WR Grace’s cooperation, they will be set to sign a definitive agreement within the next two weeks.

40 North, which is WR Grace’s biggest shareholder raised its offer to $4.6bn in its “best and final” offer the day after a standstill agreement between the companies expired.

The new offer is a 74% premium over Grace’s closing share price on 13 October 2020.

“Though the results of our work did not fully support management’s optimistic growth expectations for Grace’s specialty catalysts business, we remain firm in our belief that Grace’s full potential for all stakeholders can best be achieved outside of the public markets with proactive, hands-on management,” said 40 North in a letter.

40 North said in the letter it had “serious reservations” with regard to WR Grace’s “questionably-timed” acquisition of Albemarle’s Fine Chemistry Services business for $570m.

WR Grace outright rejected an earlier proposal of $60 per share in November. In January, 40 North upped its bid to 65 per share.

Previously, the US-based catalyst producer has said that any transaction would need to be at a price level that reflects the full value of Grace for its shareholders.

40 North is a privately held investment firm that is part of Standard Industries, a roofing and water proofing manufacturer with other businesses that make building materials.

The investment firm is WR Grace’s biggest shareholder with a stake of nearly 15%.

40 North’s proposal does not include any financing contingency, JP Morgan, Deutsche Bank, BNP Paribas are lined up as financing banks.