BASF's hostile bid for Engelhard might not be enough

By Simon Pitman

- Last updated on GMT

Related tags Takeover BASF

BASF's hostile takeover bid on leading personal care supplier looks
set to be a rocky road, with Engelhard executives warning
stockholders to be cautious over the offer and investors suggesting
that the bid will have to be raised if it is going to be meet with
any success.

Germany-based BASF has offered $37 per share to buy out a majority stake in New Jersey-based Engelard. But as shares are currently trading at the $39 mark, the offer does not look generous.

Equally analysts do not believe that BASF will raise its offer significantly, particularly as the chemicals giant is currently struggling against adverse market conditions that are forcing it to raise the prices on many of its leading lines.

Engelhard is obliged by law to make an official statement on the offer by 23 January, but in the meantime it has posted a statement on its website advising stockholders to defer taking any immediate action over the offer.

The company added that Merrill Lynch & Company were acting as its financial advisor while Cahill Gordon & Reindel LLP had been nominated as legal advisor.

Like BASF, it has also been hit by a number of global market pressures that have forced it to make price increases of between 5 and 7 per cent on a number of its leading fine chemical and material lines.

Engelhard has also announced a re-organisation of its personal care materials business, which will see it split up into three regional offices - Europe/ Middle-EastAfrica/South-America region, which will be head-quartered in Paris, an Asia-Pacific region based in Tokyo and a North America office based in New York.

Related news