Paint giants may take fight for Grow to court
Tuesday 23 May 1995
Grow set a Sunday deadline for its suitors to submit new and final offers after both had tried to buy the company in recent weeks. ICI's $22 (pounds 14) a share bid trumped Sherwin, its main rival in the American paint market, by $2 a share. But Sherwin reserved the right to come back with a higher offer.
Submitting its bid on Sunday, Sherwin said it had "serious concerns with, and does not agree to be bound by" the bidding procedures established by Grow last week. Grow instigated an auction after ICI bid $18.10 a share for the company and Sherwin Williams responded with a $19.50 counter offer. Grow said then that both offers should be in cash and final.
Grow's shares were trading at a 50c premium to ICI's offer, as the market gambled on Sherwin coming back with a better bid.
Sherwin Williams has already resorted to legal action in its bid to gain control of Grow, the acquisition of which would make ICI the world's largest paint manufacturer. After the original ICI bid was launched Sherwin issued writs against Grow and ICI, claiming that Grow had breached its fiduciary duties by not searching for the best possible offer.
As part of an amended merger agreement between ICI and Grow, ICI stands to gain $24m compensation if the agreement is terminated and Grow is subsequently acquired within six months by a third party.
ICI will now buy a 25 per cent stake in Grow, held by Corimon, a Venezuelan company, for $21.40 a share. Under the terms of its original bid the stake would have also been acquired for a 60c discount to the price being offered to other shareholders.
The fight for Grow has taken on an intensity beyond the $350m size of ICI's latest offer with analysts seeing it as a struggle for market share in a market under severe pressure.
Paint manufacturers in the US are under increasing environmental demands and are spending large amounts on research. In a commodity industry, where only price distinguishes products, manufacturers have found it impossible to charge more to make up for the research costs.
ICI and Sherwin Williams have enjoyed a tough rivalry culminating in the loss by Sherwin Williams to ICI subsidiary Glidden of the important Home Depot DIY chain account.
- 2 Disney heiress Abigail disowns her share of family profits in West Bank company
- 3 The secret report that helps Israel hide facts
- 4 'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
- 5 Israel's propaganda machine is finally starting to misfire
The secret report that helps Israel hide facts
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Boozy, ignorant, intolerant, but very polite – Britain as others see us
- < Previous
- Next >
iJobs Money & Business
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...
£450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...
£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...
£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...