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MOSCOW (MRC) -- AkzoNobel says that it
has made a non-binding proposal to acquire Tikkurila for EUR31.25/share,
valuing Tikkurila at about EUR1.4 billion (USD1.7 billion), reported Chemweek.
The company says that the offer
represents a 113% premium compared with the volume-weighted average trading
price of Tikkurila shares during the three-month period prior to 17 December
2020, when an initial offer to acquire Tikkurila was made by PPG
Industries. It also notes that it is 13% higher than PPG’s revised bid, made
on 5 January 2021 - in response to a rival bid from Hempel (Lyngby, Denmark) as
Tikkurila disclosed on 18 January. PPG launched its tender offer for Tikkurila
on 14 January after it had been recommended by
Tikkurila's board.
AkzoNobel, meanwhile, says it has agreed on key terms
with Hempel for the sale of assets, including the decorative paints business of
AkzoNobel in the Nordic and Baltic countries, to obtain merger clearance and
ensure deal certainty for Tikkurila and its shareholders. The planned
divestments would be completed after closing of AkzoNobel's proposed offer for
Tikkurila, the company says. Thierry Vanlancker, CEO of AkzoNobel, declined to
comment on the scale of divestments in an analysts' presentation held by
AkzoNobel earlier today.
“Our complementary geographic profiles would
create superior value compared to any other combination, including growth
opportunities for the company and its employees. Our collective procurement
capabilities, expanded production, and combined sales and distribution channels
would deliver substantial value creation,” says Thierry Vanlancker, CEO of
AkzoNobel.
The main offices and production facilities of Tikkurila in
Finland would become the hub for the combined business in the Baltic region and
substantial investment would be made in production facilities to supply future
growth, AkzoNobel says.
The transaction is expected to be earnings per
share (EPS) accretive in 2022, is aligned with the capital-allocation priorities
of AkzoNobel, and would be financed using existing cash and credit lines, the
company says. During the presentation today, Maarten De Vries, CFO at AkzoNobel,
said that the company sees a mid-term return on investment (ROI) period of 3-5
years for the proposed deal. In addition, AkzoNobel will continue its
EUR300-million share buyback program and maintains a target leverage ratio of
1-2 times net debt/EBITDA, the company says.
Vanlancker said during the
analysts’ briefing that AkzoNobel had not made an offer to acquire Tikkurila
earlier, because the company was not aware that Tikkurila was thinking of making
a strategic change. PPG’s offers triggered the company’s decision to submit its
own offer, since it sees Tikkurila as a perfect fit in its bolt-on acquisitions
strategy and believes that AkzoNobel could create better value for Tikkurila, he
added.
Vanlancker also said that there have been no talks with
Tikkurila’s shareholders and that AkzoNobel is waiting on Tikkurila’s board to
assess the offer. “With this offer, AkzoNobel invites the board of directors of
Tikkurila to enter into negotiations with a view to reaching agreement on a
recommended voluntary public cash tender offer,” the company
says.
Tikkurila says that its board will consider AkzoNobel’s potential
offer from the point of view of Tikkurila and its shareholders. It notes that
AkzoNobel’s offer is non-binding and subject to several conditions, and there
can be no certainty that this proposal will eventually lead to any agreement
between AkzoNobel and Tikkurila.
The finalization of the potential is
subject to customary conditions substantially similar to those included in the
current tender offer document published by PPG on 14 January 2021, Tikkurila
says. It requires reaching a 90% acceptance level and obtaining required
regulatory approvals, and would not be conditional on financing, it
says.
In addition, Tikkurila says that PPG’s offer continues to be valid
in accordance with its terms as set out in the tender offer document.
Tikkurila's board may withdraw, modify or amend its recommendation for PPG’s
tender only if the board has complied with certain agreed procedures allowing
PPG to negotiate with it and to amend the terms and conditions of its tender
offer pursuant to the combination agreement, the company says.
AkzoNobel
will continue to build on the “growth momentum” it has in the EMEA region and
move on to other M&A targets it has in its pipeline, if the Tikkurila deal
does not go through, Vanlancker said during the presentation. Analysts at
Bernstein (London, UK) say that AkzoNobel’s chances of acquiring Tikkurila will
depend largely on PPG's willingness to raise its offer further.
PPG
engaged in a hostile effort to merge with AkzoNobel in 2017, supported by
activist investor 40 North Management. The effort was stymied in part by Dutch
securities law.
As MRC informed
previously, in February 2020, PPG said it had completed its acquisition of
Industria Chimica Reggiana (ICR, Reggio Emilia, Italy), a maker of automotive
refinish products. Financial terms of the deal, including purchase price, were
not disclosed. The deal was announced on 8 January. ICR was founded in 1961 and
employs about 180 people. ICR manufactures automotive refinish products,
including putties, primers, basecoats and clear coats. It also makes a range of
coatings, enamels and primers for light commercial vehicles and other light
industrial coatings applications. ICR employs about 180 people and sells its
products in more than 70 countries in Europe, Africa, the Middle East, the US
and Latin America.
We remind
that Russia's output of chemical products rose in November 2020 by 9.5% year on
year. At the same time, production of basic chemicals increased in the first
eleven months of 2020 by 6.6% year on year, 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-November 2020 output. November production of polymers in primary form
rose to 896,000 tonnes from 852,000 tonnes in October. Overall output of
polymers in primary form totalled 9,240,000 tonnes over the stated period, up by
17.1% year on year. |
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