At least five buyout firms are to make second-round bids for Minova International, the former BP unit being auctioned for up to £300m by its owner Close Brothers Private Equity.
Charterhouse Capital, Barclays Private Equity, Candover, Hg Capital and Duke Street Capital all plan to submit offers, which are due within the next two weeks. Advent International was one of several bidders that made first-round tenders but were rejected. Several trade buyers are also interested, sources disclosed. Close Brothers hired UBS in July to run the contest.
Minova, based in Chipping Norton, Oxfordshire, and active in more than 20 countries, makes chemicals used in coal and metal mining. The auction has drawn great interest, benefiting from the surge in commodity prices and a feverishly consolidating mining sector.
That could push the final price beyond £300m. "There aren't many assets of this size and quality around," said one source involved in the process. Speciality chemicals companies also generate some of the highest margins in the sector, said Eric Terhorst, a chemicals banker with First Analysis bank in Chicago.
"It's one of those assets that because of its track record and management, they can auction quite aggressively," said another insider. "They'll get a full price, but there comes a point when the advisers can oversell it."
If Close Brothers manages to sell anywhere near the £300m mark, it will have been a stellar investment.
The firm bought Minova, formerly called Fosroc Mining when it was part of BP, for £32m in 2003. Earlier this year, Close Brothers made back 4.5 times the capital it invested when it refinanced the business.
Trade buyers that could be interested include German giant BASF and Hexion Specialty Chemicals, a Columbus, Ohio group backed by buyout giant Apollo Management.Reuse content