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.
- 2 How the language you speak changes your view of the world
- 4 Italian police 'reveal' what Jesus looked like as a young boy
'Fire at every person you see': Israeli soldiers reveal they were ordered to shoot to kill in Gaza – even if the targets may have been civilians
Italian police 'reveal' what Jesus looked like as a young boy
Who should I vote for? The Independent quiz matches best political party for undecided voters ahead of the general election
First-time buyers in London 'need to earn at least £77,000'
General Election 2015: Photographic history of Bullingdon Club tracked down - including new picture of David Cameron in his finery
In defence of liberal democracy
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...