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Elementis rejects USD819-million buyout offer from Minerals Technologies

November 17/2020

MOSCOW (MRC) -- Specialty chemicals producer Elementis (London, UK) has rejected a GBP621-million (USD819 million) all-cash buyout offer from Minerals Technologies (New York, New York), saying the valuation for the company is too low, according to Chemweek.

Elementis’s board confirms it received a proposal on 5 November from Minerals Technologies for a possible cash offer of 107 pence per share, and says it has unanimously rejected the conditional proposal as it “significantly undervalued Elementis and its future prospects.” There can be “no certainty either that an offer will be made nor as to the terms of any offer, if made. A further announcement will be made when appropriate,” it adds.

The offer represents a premium of 31% to the closing price of 81.70 pence per Elementis share on 4 November, according to Minerals Technologies. Elementis has over 580 million issued shares at present.

Mineral Technologies says it is “currently considering its position” following the rejection of its offer, adding that its proposal represents a premium of 47% to Elementis’s 90 trading-day volume weighted average share price of 72.66 pence as of market close on 4 November. “However, any offer would be likely to be solely in cash,” it says.

Elementis, founded in 1844, manufactures additives for products in the consumer and industrial markets, including personal care, coatings, chromium, energy, and talc. Rothschild & Co. is acting as financial advisor to Elementis. The company in October reported lower volumes year on year for the third quarter, with a sequential improvement in trading compared with the second quarter. 

Minerals Technologies is required in accordance with stock market regulations by 10 December to announce either a firm intention to make an offer for Elementis or that it does not intend to proceed.

As MRC reported earlier, Elementis has just entered an exclusive distribution agreement with DKSH (Zurich, Switzerland), a holding company specializing in market expansion services, for personal care applications in the French market.

We remind that Russia's output of chemical products rose in September 2020 by 6.7% year on year. At the same time, production of basic chemicals increased by 6.1% year on year in the first nine months of 2020, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-September output. Last month's production of primary polymers decreased to 852,000 tonnes from 888,000 tonnes in August due to shutdowns in Tomsk, Ufa and Kazan. Overall output of polymers in primary form totalled 7,480,000 tonnes over the stated period, up by 16.4%  year on year.

Elementis plc is one of the UK's largest speciality chemicals business. The Company comprises three businesses: Specialty Products, Surfactants and Chromium. Both Specialty Products and Chromium hold leading market positions in their chosen sectors. Elementis employs over 1,200 people at more than 30 locations worldwide.
Author:Margaret Volkova
Tags:coatings, petrochemistry, adhesives, paints and coatings, Elementis Specialities, UK, Russia, France, Switzerland.
Category:General News
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