Updated from 12:45 p.m. EST
( BF) went public with an unsolicited $37-a-share offer for chemical rival
BASF, of Ludwigshafen, Germany, said the $4.9 billion bid represents a 30% premium to Engelhard's 90-day average trading price through Dec. 20, the last trading day before BASF first made an overture to Engelhard management. The offer also represents a 23% premium to Engelhard's Dec. 30 close. BASF said it has tried to negotiate with Engelhard but that its entreaties have been rebuffed.
Engelhard shares surged 27% in Tuesday action, rising $7.85 to $38. The company said late Tuesday that its board would consider the proposal.
BASF said the acquisition of Iselin, N.J.-based Engelhard would make it a leading provider worldwide in the dynamically growing catalyst market.
"Engelhard is an excellent enhancement for the BASF portfolio," said BASF Chairman Jurgen Hambrecht. "By combining the R&D activities of both companies, BASF would create a unique global technology platform for catalysts and open up further growth and innovation potential."
BASF said in a letter to Engelhard's board that it would soon start a tender offer. BASF said it "has made efforts to negotiate a friendly transaction with Engelhard's board of directors and management," and added that it "is prepared to meet with the Engelhard team to see whether Engelhard can demonstrate value in addition to that discernible from the publicly available information that might enable BASF to increase the price that it proposes to pay for Engelhard" by a dollar a share.
But "these efforts have been rebuffed," BASF added, laying out its case in a letter to the Engelhard board. BASF's letter indicates the offer isn't contingent on financing and that the German company foresees no insurmountable regulatory hurdles.