Elementis Rejects Minerals’ Third Offer
Undeterred by the rejection of its two previous offers, Minerals Technologies submitted a revised and third proposal on Dec. 4 to take over UK specialty chemicals company Elementis.
The US specialty minerals firm raised its cash offer to 130 pence per share, up from its prior offer of 117 pence per share. The first offer was at 107 pence per share.
However, once again, the Elementis board has unanimously rejected the proposal, stating that it still significantly undervalues the company and its future prospects.
Elementis chair Andrew Duff commented: “Elementis has refocused its business and built strong market positions in three high-margin specialist sectors with strong underlying growth. We have a clear strategy to capture this growth and profitability and we are confident that this will deliver significant value for our shareholders. It is the quality of these businesses that has attracted Minerals Technologies.”
In its assessment of Minerals’ offer, the Elementis board said the timing of the proposal was “highly opportunistic” and comes at a low point due to the impact of Covid-19 and the industrial cycle. It also fails to reflect expected earnings growth based on investments made.
The London-headquartered company added that trading in the fourth quarter of 2020 continues to be resilient and in line with expectations, noting that while demand is still impacted by the Covid-19 pandemic, sales in October and November have shown sequential progress versus the third quarter.
It noted that the closure last month of its plant in Charleston, West Virginia, USA, will deliver $10 million of annual supply chain savings in 2021. Production at Charleston has been consolidated at its facility in St. Louis, Missouri.
Author: Elaine Burridge, Freelance Journalist
