Laporte's pounds 1.5bn deal founders on Hoechst veto
Wednesday 14 April 1999
The British group baffled the City when it said that talks with a potential bidder had ended, less than 24 hours after admitting it was discussing an offer. The collapse sent Laporte shares crashing 12.5 per cent to 667.5p.
Sources close to the deal said the embarrassing U-turn was prompted by Hoechst's last-minute opposition. The German chemicals and pharmaceutical group, which holds 45 per cent of Clariant, is believed to have vetoed the deal at a meeting with the two companies on Monday night. The German company was concerned that a Clariant-Laporte deal might jeopardise its own merger with Rhone-Poulenc of France. Hoechst needs to sell its chemical businesses, including its stake in Clariant, before merging with Rhone- Poulenc, and was worried that corporate action by Clariant might delay the process.
Industry sources said Hoechst could also have hesitated at the prospect of financing part of the Laporte deal as Clariant was likely to add to its $1.9bn (pounds 1.2bn) debt to fund the takeover.
"It was a done deal, they went for agreement from Hoechst and they were refused," one insider said. Another source said the deal cleared all relevant hurdles before foundering on Hoechst's concerns. "This is not about price, nor management, personalities, strategy, due diligence or competition issues," he said.
Analysts said the collapse of the takeover was a huge embarrassment both for Clariant and Laporte's chief executive, Jim Leng. They said the demise of the deal would prompt other chemicals groups to bid for the UK company. "Laporte is in play now. The fact that they were willing to agree a takeover means they are now up for sale," said one analyst.
Industry experts said the US group PPG and some European players, including Viag and Degussa-Hels of Germany, could enter the fray.
This is the second setback in four months for Clariant's expansion plans. Last year the group dropped plans for a $8.1bn merger with Swiss rival Ciba Speciality Chemicals.
Liam Neeson's Downton dreams
Thriller is set in the secret world of British espionage
Bomber jacket worn by Mary Berry sells out within an hour
Much-loved cartoon character returns - without Sir David Jason
Actress to appear in second series of the hugely popular crime drama
- 1 Thailand beach murders: Thai PM suggests 'attractive' female tourists cannot expect to be safe wearing bikinis
- 2 Scottish independence: What you shouldn't tweet about if you want to avoid jail today
- 3 Scottish independence: Five reasons Salmond is secretly hoping for a 'No' vote
- 4 Isis plan to 'behead random member of the public' in Sydney thwarted by Australian police
- 5 Scottish independence: Andy Murray backs Yes campaign in eleventh hour decision
Thailand beach murders: Thai PM suggests 'attractive' female tourists cannot expect to be safe wearing bikinis
Scottish independence referendum live: Latest news as Scotland votes Yes or No
Scottish independence: Final opinion polls show undecided voters could swing result either way
Scottish independence: Almost half of No voters have felt 'personally threatened' by the Yes campaign
Isis plan to 'behead random member of the public' in Sydney thwarted by Australian police
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence referendum: A nation divided against itself
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
iJobs Money & Business
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...
To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...
Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...