Private Equity Bids For TPC

The private equity firms SK Capital Partners and First Reserve are teaming up to buy TPC Group, a Houston-based processor of butadiene and other C₄ chemicals, in a transaction valued at $850 million, including debt. TPC, formerly known as Texas Petrochemicals, generated income of $37 million last year on sales of about $2.8 billion. TPC refines “crude C₄s” into components such as butadiene and 1-butene. It also makes the fuel additive methyl tert-butyl ether and specialty C₄ derivatives. SK Capital’s portfolio includes the former Solutia nylon business, Ascend Performance Materials, which it acquired in 2009. First Reserve focuses primarily on the energy sector. The private equity bid confirms published reports, circulating since July, of a potential TPC takeover. TPC management says the offer price of $40.00 per share represents a 20% premium over TPC’s share price on July 24, just prior to the reports. Shareholders representing 22% of TPC’s equity have pledged to vote in favor of a deal. However, Sandell Asset Management, which owns a 6% stake in TPC, wrote to TPC to express its “outrage” over the low value of the deal.