The conditional offer from Innospec on Mar. 31 was £1.60 per share, with a maximum 50% cash alternative together with a mix and match facility, that valued Elementis at more than £1 billion. However, Elementis rejected the offer on Apr. 9 and Innospec has subsequently confirmed that it has withdrawn its interest and “ceased active consideration” on Apr. 15.

Innospec said the combination would have been “a compelling strategic fit,” creating benefits for both sets of shareholders. The Littleton, Colorado-based group said its proposal would have enabled Elementis shareholders to share in future value creation substantially beyond the headline offer price through significant anticipated synergies and an expected re-rating of the Elementis business to Innospec’s materially higher valuation multiple.

But Elementis’ board thought differently and said the proposal significantly undervalued the company, an assessment supported by the encouraging start to 2021. It added that the substantial element of the consideration being in Innospec shares also made the proposal less attractive for Elementis shareholders.

“The board firmly believes in the attractive value to be delivered for Elementis shareholders through the execution of our strategy,” said its chairman, Andrew Duff. “The business has good momentum and is delivering on its Innovation, Growth and Efficiency strategy with clear medium-term objectives that will deliver significant value to Elementis shareholders. This conditional proposal does not reflect this value.”

In November and December last year, Elementis rejected three takeover bids from US-based Minerals Technologies, which finally offered £1.30 per share, up from its first offer of £1.07 per share. Elementis unanimously turned the offers down, stating that they all undervalued the company and its future prospects.

Author: Elaine Burridge, Freelance Journalist