W.R. Grace Gets $4 Billion Takeover Offer From Holder 40 North

W.R. Grace shares leap as the producer of engineered materials receives an unsolicited $4 billion takeover bid from one of its top shareholders.
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W.R. Grace  (GRA) - Get Report shares leaped after a media report said the supplier of catalysts and engineered materials received a $60-a-share, or $4 billion, cash takeover offer from its biggest holder, 40 North.

The unsolicited offer represents a 36% premium to the Columbia, Md., company’s Friday close, according to a regulatory filing reported by Bloomberg.

40 North, an investment platform tied to Standard Industries of New York, is Grace's biggest shareholder with a stake of around 15%, according to Bloomberg data. Closely held Standard has interests in roofing, building materials, solar energy and more.

W.R. Grace shares at last check jumped 27% to $55.85. In 2020 through the close of trading Friday, the stock was 40% below its 52-week high above $73, set in mid-January. 

And the stock has significantly underperformed since W.R. Grace spun off its GCP Applied Technologies unit in 2016, 40 North says, according to Bloomberg.

“We believe this proposal to take the company private represents the most credible path to unlock value for the company and its shareholders with a high level of certainty,” 40 North principals David Millstone and David Winter wrote in a letter to W.R. Grace’s board.

The firm hired Citigroup as an adviser. It said that it believed it could complete a due-diligence review of Grace within four weeks. And it said it would back a so-called go-shop effort by Grace to solicit higher bids, Bloomberg reported.

Kathleen Reiland, a director of W.R. Grace representing 40 North, resigned her almost a month ago due to disagreements over the company’s strategic direction, Bloomberg reported.

W.R. Grace has seen a downturn in some of its key industries, including refining, aerospace and automotive. Grace Chief Executive Hudson La Force has been driving efficiencies at Grace, as he targets a $125 million boost to cash flow this year, the news service said.

The company operates and sells products in over 70 countries. It also makes specialty silica used in covid-19 test kits and treatments.