BASF Ups Bid For Engelhard Again

BASF has upped the ante for Engelhard again, increasing its offer to acquire the New Jersey-based company by $1.00, to $39 per share. Engelhard says its board will meet to review the latest offer and has asked shareholders to take no action at this time.

“We want to make it very clear: This is our last, best, and final offer,” BASF Chairman Jürgen Hambrecht said. “Under no circumstances will we raise our price again.” Earlier this month, BASF nominated five candidates for election to Engelhard’s board at the firm’s June 2 annual meeting. If the five win board seats, they will constitute a majority of the nine-person board and will have the power to accept BASF’s merger proposal.

If Engelhard’s shareholders don’t vote in favor of the BASF nominees, Hambrecht has promised that he will allow the offer to expire on June 5 and turn his attention to other opportunities.

Engelhard’s current board opposed a $37-per-share, $4.9 billion bid that BASF first made in January and rejected a second offer of $38 per share a few weeks ago. Engelhard just forecast strong earnings for the second quarter, signaling to shareholders that the firm is more valuable than BASF contends.

“Our people continue to generate excellent results despite the distractions associated with BASF’s hostile takeover campaign,” Engelhard Chief Executive Officer Barry W. Perry said in announcing the forecast.

Still outstanding is Engelhard’s counteroffer to shareholders to pay $45 each for up to 20% of its own shares. Engelhard has also put up a slate of five directors who back the company’s plan to remain independent. If they win, Perry argues, Engelhard will be able to pursue its strategy without the distraction of BASF’s unwanted advances.

However, BASF’s Hambrecht expects his firm to succeed in the takeover battle. He warns Engelhard’s shareholders of the “risk and uncertainty” of Engelhard’s $45-per-share offer because it depends on borrowed money. “We are confident that Engelhard’s shareholders will recognize the superior value for all their shares and the complete certainty that BASF is offering,” he says.