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Elementis, Grace reject takeover approaches

Two players in speciality chemicals, Elementis in the UK and W.R. Grace in the US, have both been approached with conditional takeover offers and have both rejected them in recent weeks.

Elementis announced on 12 November that it had received a preliminary conditional proposal from Minerals Technologies in relation to a possible cash offer at £1.07/share. Based on consultation with its financial adviser, it concluded that this “significantly undervalued Elementis and its future prospects” and the board unanimously rejected it.

Confirming the approach, Minerals Technologies said that it is “currently considering its position”. It is now required to either announce a firm intention to make an offer for Elementis or that it does not intend to by no later than 17.00 on 10 December. The offer was 31% above the closing share price and 47% above its 90 trading-day volume weighted average share price, on 4 November, the day before the offer.

Meanwhile, W.R. Grace revealed on 9 November that it had received a proposal from 40 North Management, a private equity firm that holds about 15% of its shares, to acquire it in full for $60/share in cash, subject to certain conditions. A letter from 40 North described this as “the most credible path to unlock value for the company and its shareholders with a high level of certainty”.

In rejecting this, the board unanimously agreed that, despite current uncertainties, this offer “significantly undervalues the company and is not a basis for further discussion”. While open to offers, they said, “Grace is focused on executing its long-term strategy and advancing its key investments to accelerate profitable growth, improve its competitive advantages and strengthen its portfolio”.

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