US offer for Albright may be trumped

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The Independent Online
THE BATTLE for Albright & Wilson, the chemicals group, warmed up yesterday when the French company Rhodia said it might trump a pounds 408m cash offer from its US rival Albemarle.

Rhodia, majority-owned by drug company Rhone-Poulenc, revealed that it had held preliminary talks with A&W and was "reviewing its options".

Sources close to the company said the Rhodia management was in talks with its bankers on whether to outbid Albemarle's offer for A&W, the UK's largest producer of chemicals for detergents and carbonated drinks. "The Albemarle offer is not the end game - there are other people interested in this company," a source said.

The statement by Rhodia, a leading producer of fine chemicals with sales of over 5.5bn euros (pounds 3.3bn), was triggered by Monday's bid by Albemarle. The US speciality chemicals company's 130p-a-share bid was recommended by A&W's board but not accepted by Phillips & Drew, the largest shareholder.

P&D, which has a 24 per cent stake, held out for a higher bid, followed by another fund manager, M&G, which owns 5 per cent of A&W. However Mercury Asset Management, A&W's second-largest shareholder, accepted the offer and sold most of its 12 per cent stake to Albemarle.

City analysts predicted that other firms could enter the bid battle after today's A&W results. They said the figures should confirm the UK group's continuing problems with the downturn in chemical markets and the strength of the pound, and flush out other bidders.

The US group FMC and a private UK company backed by the venture capitalists CVC are believed to have approached A&W in the past few months.

Industry experts said the Albemarle offer undervalued the UK company and predicted the final bid price could rise to up to 150p. "I think in a week you are likely to see a bid north of 140p per share," an analyst said.

Shares in A&W, which slumped as sales were hit by tough chemical markets, rose yesterday by 10.5p to 140p.