White knight bidder prompts US giant to increase its offer
US-chemicals giant Hercules looks set to win its battle to take over Bradford-based chemicals manufacturer Allied Colloids.
Earlier this week the US firm raised its bid twice in seven hours, as a rival white knight bidder emerged from the sidelines.
After raising its offer on Monday morning from £1.1bn to £1.2bn, Swiss giant Ciba Speciality Chemicals said it was in talks over a possible £1.3bn cash takeover of the UK company.
Hercules responded by close of play with a new £1.35bn offer.
Swiss-owned Ciba Speciality Chemicals may still raise its offer. The company, spun out of pharmaceuticals firm Novatis last year, is worth an estimated £5.1bn. It is believed to be interested in Allied Colloids’ speciality pollution and water treatment business.
The public battle for Allied Colloids came only days after Hercules dismissed a defence document from Allied Colloids rejecting its £1.1bn takeover bid.
David Farrar, chief executive of Allied Colloids said: ‘Shareholders should keep the benefits for themselves and reject Hercules’ meagre offer.’
He claimed that the company had completed a process of change which was put in motion when he became chief executive three years ago.
He cited moves to increase productivity at its existing plants that will produce a significant increase in capacity over five years.
Farrar said the disposal of its superabsorbents business has allowed it to convert one of the two lines at its Cleethorpes plant to powder grade flocculant, creating additional capacity for a profitable mainstream product line.
Farrar claimed the line could operate at 80% capacity by next year, bringing potential sales of £22.8m and gross profit of £11.9m, rising to £27.2m and gross profit of £14.9m, at full capacity.