Jan 4 2006
BASF Aktiengesellschaft, the world’s leading chemical company, has made an all-cash proposal to acquire all outstanding shares of common stock of Engelhard Corporation, Iselin, New Jersey, USA, a Fortune 500 company and leading supplier of goods for catalysis and surface finishing, for US$37.00 per share or an aggregate of US$4.9 billion. This price represents a 23% premium above the December 20, 2005 closing price of Engelhard’s stock of US$30.05 and a 30% premium over Engelhard’s 90-day average share price (VWAP) of US$28.42 as of December 20, 2005. This price also represents a premium to Engelhard’s 2005 year-end closing price of US$30.15 and to the four-year-high closing price of US$32.49 achieved on July 14, 2004.
By acquiring Engelhard, BASF would become a leading provider worldwide in the dynamically growing catalyst market. “Engelhard is an excellent enhancement for the BASF portfolio,” said Dr. Jürgen Hambrecht, Chairman of the Board of Executive Directors of BASF Aktiengesellschaft. “By combining the R&D activities of both companies, BASF would create a unique global technology platform for catalysts and open up further growth and innovation potential.”
The proposal reflects what BASF believes is an opportunity for significant value for Engelhard’s stockholders: a robust premium over Engelhard’s current stock price; and a fully financed, all-cash transaction, with no significant regulatory hurdles anticipated based on present knowledge.
“We believe that our all-cash proposal provides a compelling opportunity to achieve significant value for Engelhard’s stockholders,” said Dr. Hambrecht. “We hope that Engelhard’s Board and management will recognize this opportunity as well as the benefits for Engelhard’s employees. We look forward to continuing and strengthening business relations with Engelhard’s customers.”
BASF has made efforts to negotiate a friendly transaction with Engelhard’s Board of Directors and management. BASF has said that its team is prepared to meet with the Engelhard team to see whether Engelhard can demonstrate value in addition to that discernible from the publicly available information that might enable BASF to increase the price that it proposes to pay for Engelhard by US$1.00 per share. These efforts have been rebuffed. Following Engelhard’s refusal to enter into a dialogue with BASF, BASF earlier today a letter to Engelhard’s Board of Directors.