Danisco is expected to post strong third-quarter results on Thursday, which could pressure U.S. chemicals group DuPont to raise its $5.9 billion offer for the Danish food and enzymes producer.

Last month DuPont extended its 665-crowns-per-share offer until April 1 after only 5% of Danisco shareholders had accepted.Some shareholders have said they want a higher price, based on what they see as Danisco's good earnings potential.

Analysts polled by Reuters expect on average a 38% increase in earnings before interest and tax (EBIT) for the three months to end-January, to 468 million Danish crowns ($86.65 million).
Handelsbanken analyst Dan Togo Jensen said that EBIT of around half a billion crowns in the quarter would likely lead to another upward adjustment of Danisco's full-year guidance and give shareholders new ammunition in the "war of position" between them and Dupont.

"A strong result for the third quarter would strengthen the Danisco shareholders' argument that Danisco is worth more to DuPont than what they have offered," Jensen said.

He saw a fair chance that DuPont would raise its bid by 30-50 crowns per share, although the U.S. company has repeatedly said it will not raise the offer, which was endorsed by Danisco's board.
Financial analysis firm Aktieinfo's chief analyst Lau Svenssen said a good third quarter could give DuPont an excuse to revise the bid.

"It seems as if they have reached a deadlock and then you need something to break the ice and talk again," Svenssen said. He said that high oil prices have raised the value of Danisco's enzymes technologies for biofuels.

However, Jyske Bank's analyst Jens Houe Thomsen said he did not think Dupont would come up with a higher bid as no competing offers have emerged.

Danisco agreed in January to be acquired by DuPont for $5.9 billion in cash plus assumption of $500 million in debt. The deal depends on acceptance by shareholders with at least 90% of Danisco's stock.

Little Third Quarter
The third quarter running from Nov. 1 to the end of January is normally Danisco's least impressive, but analysts will focus on whether its diverse businesses have kept up the performance that led management to upgrade its full-year outlook in December.

"We expect the improvement in profitability in Sweeteners will continue after last year's very difficult conditions for the xylitol product," Thomsen said in a research note to clients.

He said that rising raw materials prices have made it even more important for Danisco's clients to get more out of their products by using enzymes, which was likely to boost Danisco's business.

Rising oil prices may boost demand for enzymes for the production of biofuels and detergents, but higher input prices for materials such as palm, soya and rapeseed oil are negatives for Danisco.