BASF Secures Majority Stake in Engelhard Share Capital
June 7, 2006
BASF said in a statement that following the expiration of its takeover offer on June 5, Engelhard shareholders had handed over around 110.5 million of their shares for $9 (7 euros) in cash.
The German chemicals giant added that the remaining Engelhard shareholders would now have until June 8 to accept the offer.
"This is a special day for both BASF and Engelhard," BASF chairman Jürgen Hambrecht said. "With the acquisition of the majority of the shares and the expected closing of our transaction shortly, BASF can now begin with the integration in order to create a leading provider worldwide in the dynamically growing catalyst market," Hambrecht said. "It will strengthen BASF's profitable growth rate."
Biggest takeover in 141-year history
Last week, after months of hostile face-off, the two sides reached agreement on the terms of a 5.1-billion-dollar takeover deal, the biggest in BASF's 141-year history.
BASF is keen to get its hands on Engelhard because the US firm is the world leader in chemical catalysts, whose emissions-reducing qualities have become a mainstay of vehicles worldwide ever since Engelhard launched them in the 1970s.
The Ludwighafen-based BASF had always said it would prefer the takeover to be a friendly rather than a hostile move, but was prepared to press ahead with a hostile bid if necessary.
And for months, it was indeed a hostile affair, as Engelhard management repeatedly rejected BASF's advances, primarily because they believed the offer price was too low.
However, after shooting up initially following the launch of BASF's bid, Engelhard shares fell again recently to just below the offer price. As a result, Engelhard management agreed that the German company's offer "provides fair value to our shareholders," the US firm said.
BASF's persistence pays off
Both sides therefore signed a "definitive" agreement, whereby Engelhard "will recommend that Engelhard shareholders tender their shares to BASF in exchange for $39 per share in cash," the two companies said in separate statements.
BASF originally launched its bid for Engelhard in January, setting a price of $37 dollars per share. The German giant had signaled it might up the offer if Engelhard gave BASF access to its data room and show that a higher price was warranted.
It then raised the offer to $38 per share after having taken a look at Engelhard's books and recently upped the price again for a final time to $39 in an attempt to secure an amicable deal. BASF's perseverance finally paid off.
On Tuesday, BASF's management said it would take up to a year for the formal takeover of Engelhard to be complete.