Engineering News

BASF says extends offer for Engelhard by two weeks
Mon Apr 17, 2006 6:56 AM ET

FRANKFURT, April 17 (Reuters) - German chemicals group BASF plans to extend its $4.9 billion offer for U.S. catalyst and pigment maker Engelhard by two weeks and has yet to decide yet whether to raise its bid, BASF said on Monday.

BASF said it would extend the $37-a-share offer to April 28. The offer period had been due to expire on April 14.

BASF, the world's largest chemicals maker by sales, said Engelhard had requested a firm offer by Wednesday, but that it was continuing to look at the U.S. firm's books and had not decided on whether to submit a revised offer for the company.

"BASF continues its review of non-public information provided by Engelhard and has not decided whether to submit a revised offer to Engelhard's management and, if it does, at what price," the company said in a statement.

A BASF spokesman reiterated the company's position that if information disclosed to it by Engelhard justified a higher offer, BASF was prepared to revise the bid to $38 a share.

"We need more time to check the non-public information from Engelhard. We believe our offer is fair and have not decided yet on a revision," he said.

The takeover bid is the biggest in BASF's 140-year history. BASF wants to reduce the cyclical nature of its portfolio and achieve a strong position in the lucrative market for pollution control materials.

The proposed takeover represents a change in BASF's strategy of not going in for big acquisitions, a shift which began with its acquisition of the construction chemicals business of German rival Degussa for 2.7 billion euros last month.

If the Engelhard takeover were to go through, it would help the company soak up excess cash on its balance sheet generated by its highly integrated manufacturing process by which one BASF factory makes the inputs needed by another.

BASF made its hostile bid on Jan. 3, but said last month that it had signed a confidentiality clause with Engelhard that would give it access to the U.S. company's books, increasing the probability of an agreed deal.

BASF said a total of 654,180 Engelhard shares had been tendered into the offer and not withdrawn, down from the 767,913 shares at the time of the last update on March 16.

Source: Reuters

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