W.R. Grace Climbs on $7B Pact to Be Bought by Standard Industries

W.R. Grace, the subject of takeover speculation for several years, agreed to be acquired by Standard Industries for $70 a share.
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W.R. Grace  (GRA) - Get Report was rising Monday after the specialty chemicals company said it had agreed to be acquired by Standard Industries Holdings in a transaction valued at $7 billion.

Shares of the Columbia, Md., company at last check were 6.6% higher at $68.45. 

Under terms of the transaction, Standard Industries Holdings will pay $70 cash for each W.R. Grace share. 

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That's a premium of about 59% over Grace’s closing price of $44.05 on Nov. 6, the last trading day before 40 North’s initial proposal to acquire the company was disclosed, on Nov. 9. 

40 North is an investment business of Standard Industries that is focused on public entities, according to the company's website.

W.R. Grace had shot down 40 North's $4 billion takeover offer, saying it “undervalues the company and is not a basis for further discussion.”

In January, Grace said it was willing to discuss a possible sale to 40 North after the New York company increased its unsolicited offer.

Earlier this month, 40 North sweetened its offer to $70 a share from $65, according to Reuters.

40 North, which holds 14.9% of Grace, has agreed to vote its shares in favor of the transaction. 

Grace will suspend payment of a dividend. The company will report its first-quarter earnings results on May 6 but will not be hosting an earnings conference call.

The deal is expected to close in the fourth quarter, subject to conditions including regulatory clearances and a vote of W.R. Grace shareholders. 

Grace will operate as a standalone company within the portfolio of Standard Industries Holdings, which includes GAF, BMI Group, Schiedel, Siplast, SGI and GAF Energy.

“We are confident that our agreement with Standard Industries Holdings is the best path forward for Grace and our shareholders,”  Hudson La Force, Grace’s President and CEO said in a statement. 

The company has been the subject of takeover speculation for several years.