Takeover failure: UK’s Elementis rejects US private equity bid
US private equity firm KPS Capital Partners has been rejected in its takeover offer for UK-listed chemical company Elementis.
Elementis rejected a 160p per share takeover, with Reuters reporting that the firm’s board wanted around 180p. The firm is currently trading on 139p per share.
Elementis has been under pressure for months from its shareholders to pursue a takeover bid, as the firm’s investors urge it to engage with buyers.
In an open letter, Franklin Mutual Advisers, which controls 9.8 per cent of Elementis, called for the firm’s chair and board of directors to pursue a takeover.
“We are deeply concerned that, once again, the board does not appear to be acting in the best interests of its shareholders,” the firm’s senior vice president and portfolio manager Steve Raineri wrote.
Franklin Mutual Advisers previously called for the firm to pursue a buyout in September last year, and was joined by other investors when it published an open letter.
The letter noted that Elementis had previously had prior offers from Minerals Technologies in December 2020 for 130p per share, and from Innospec in March 2021 for 160p, indicating that it was a “desirable acquisition target”.
“We believe this indication of interest should be the catalyst to launch a formal process to maximise shareholder value,” Raineri wrote.
Following the news of the rejected takeover, the share price of Elementis shot up by 13.9 per cent today.
In the firm’s most recent trading update, Elementis said it expected adjusted operating profits to come to $102-$104m last year.
Elementis and KPS both did not respond to requests for comment.