Advertisement

If you have an ACS member number, please enter it here so we can link this account to your membership. (optional)

ACS values your privacy. By submitting your information, you are gaining access to C&EN and subscribing to our weekly newsletter. We use the information you provide to make your reading experience better, and we will never sell your data to third party members.

ENJOY UNLIMITED ACCES TO C&EN

Business

More On TPC Takeover

Firm works to assure shareholders that, private equity sale, it has set a fair price

by Alexander H. Tullo
September 14, 2012 | A version of this story appeared in Volume 90, Issue 38

The management of C4 chemical supplier TPC Group is mounting a defense of its agreement to sell itself to the private equity (PE) firms SK Capital and First Reserve for $850 million. Critics say the $40.00-per-share offer lowballs the company’s true value and potential.

Leading the charge against the deal has been Sandell Asset Management, which owns a 7% stake in TPC. In a white paper, Sandell says TPC could be worth as much as $71.00 per share. The firm calls the $40.00 offer “a sweetheart deal for the PE buyers and management, allowing them to steal the company on the cheap from shareholders without a full and proper auction.”

In its proxy statement, issued last week to detail deal information to shareholders, TPC describes the months before the agreement. After SK and First Reserve first approached TPC in December 2011, nine other parties expressed interest in acquiring TPC. Six of these were “strategic bidders,” most likely other chemical companies. However, few of these interactions yielded solid acquisition proposals, and by the end of July TPC was negotiating with SK and First Reserve exclusively.

TPC also defends the planned sale by pointing to expensive and risky growth initiatives, which would be challenging for the firm to fund by itself. Last week, for example, the firm’s board approved a $265 million project to restart a dehydrogenation unit that would convert isobutane into isobutylene. TPC also wants to build a plant that would make butadiene from n-butane.

Article:

This article has been sent to the following recipient:

0 /1 FREE ARTICLES LEFT THIS MONTH Remaining
Chemistry matters. Join us to get the news you need.