The Albemarle offer of 130p per share was recommended by A&W's board but met with a muted response from Phillips & Drew, the UK group's largest shareholder. P&D, which owns a stake of around 24 per cent, refused to immediately accept the offer and is believed to be waiting for other bidders to enter the fray.
However, other large shareholders, including Mercury Asset Management, were believed to have sold part of the holdings to Albemarle. The Virginia- based company, which has a market value of over $1bn, said last night that it had acquired over 18 per cent of A&W on the market.
Insiders said that A&W, which produces chemicals for agriculture and detergents, has been approached by at least two other parties, tipped to be the French group Rhodia, part of the pharmaceutical giant Rhone- Poulenc, a UK financial buyer. US groups including FMC and Witco, two large chemical producers, could also be interested in A&W.
Industry experts said that potential bidders were likely to wait for A&W's results tomorrow before deciding whether to trump Albemarle's bid.
They added that, although the US group's offer was pitched at a 70 per cent premium to A&W's share price before the announcement of takeover talks, a bid war could increase the offer price to around 150p.
"The upside of waiting for a few days is possibly another 20p on the offer price," one investor said.
Shares in A&W have been battered by a cyclical downturn in chemical markets and were trading some 50 per cent below their 1995 flotation price before the start of bid speculation. They closed up 19.5p to 129.5p yesterday.
The Albemarle chief executive officer Floyd Gottwald defended the bid and said that a combination with A&W would boost his company's geographical spread, giving it an important foothold in Europe. He added that A&W's products were complementary to Albemarle's polymer and fine chemicals and he did not foresee large job cuts among A&W's 1,850 UK staff.
The combined group would have sales of around pounds 1.3bn and a total staff of over 4500 people with operations in most major markets in the world.Reuse content