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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.

W.R. Grace  (GRA) - Get W R Grace & Co 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.

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“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.