US chemical maker A. Schulman abandons buying Ferro Corp
03 Jul 2013
US chemical maker A. Schulman Inc yesterday abandoned its $563-million takeover bid for Ferro Corp, after its smaller rival rejected its stock and cash offer.
Schulman had first contacted Ferro in November 2012 and made an offer in a letter on 13 February 2013, which Ferro's board rejected and expressed their belief that the company should remain independent.
In March, Ohio-based Schulman Inc launched a $563 million unsolicited cash and stock bid for Ferro. Under the proposed deal, offered to pay $6.50 per Ferro share, including $3.25 in cash and $3.25 worth of Schulman common stock. (See: US chemical company A Schulman launches $563 mn unsolicited bid for Ferro Corp)
The takeover offer represented a 25-per cent premium over the closing price of Ferro common stock on 1 March and a 32 per cent premium over its volume-weighted average trading price over the preceding 60-day period.
Schulman said its offer was based on publicly available information about Ferro that showed sales of about $1.2 billion reported for the first nine months of fiscal 2012. However, the company said the offer could be adjusted subject to customary due diligence.
Joe Gingo, CEO of Schulman yesterday said on a conference call with analysts that his company has given Ferro's board enough time to initiate talks, and since they have not done so, Schulman will now look at other opportunities.
Ferro is a global supplier of technology-based performance materials for manufacturers. Its materials improve the performance of products in several end markets, including building and construction, automotive, appliances, electronics, household furnishings, pharmaceuticals, and industrial products.
The company has approximately 4,950 employees globally and reported 2011 sales of $2.2 billion.
In October last year, Ferro posted a third-quarter loss of $316 million after writing down a significant amount related in part to its loss making solar pastes business.
In February, it sold its solar pastes business to Germany-based precious metals and technology company Heraeus for an undisclosed sum.
Schulman is an international supplier of high-performance plastic compounds and resins to customers spanning a wide range of markets such as packaging, mobility, building and construction, electronics and electrical, agriculture, personal care and hygiene, sports, leisure and home, custom services and others.
The company has 34 manufacturing facilities globally and had net sales of $2.1 billion for the fiscal year ended 31 August 2012.
