DuPont raises offer price for Danisco to $ 6.64 b

Wednesday, 4 May 2011 00:00 - - {{hitsCtrl.values.hits}}

NEW YORK/COPENHAGEN: DuPont raised its offer for Danisco by 5% to $6.64 billion on Friday, bowing to pressure from dissident Danisco shareholders who had complained the initial offer was too low.

DuPont Chief Executive Ellen Kullman had aggressively courted shareholders of the Danish food additive maker for weeks. The US chemicals maker wants Danisco’s technology as part of a bigger push into the foods business.

A confluence of minority shareholders who insisted on a higher bid stood firm, forcing DuPont to tweak the offer. “This is a very strong sign of dedication on the side of DuPont,” Danisco’s Chief Executive Tom Knutzen told Reuters. “This can only strengthen the (Danisco) board’s recommendation to shareholders” to accept the deal. DuPont raised its offer to 700 crowns per share (US$139.28) from 665 crowns per share.

One analyst questioned whether that would be enough. “At the end of the day, in a buoyant market, a 5% uptick really isn’t that much,” said Hassan Ahmed, an analyst with the chemical research firm Alembic Global. “These days you spend a couple of days and you’ll see that kind of appreciation in your share price anyway.” DuPont also lowered the percentage of Danisco shares it said it would need to close the deal to 80% from 90%.

To de-list Danisco from Denmark’s stock exchange DuPont needs at least 90% of Danisco shares. By saying it now will move forward if only 80% of shares tender, DuPont is effectively admitting it will run Danisco as a majority shareholder until it is able to buy 90% of shares in the open market.

Not ending up with full control of the company is a concern, Alembic’s Ahmed said. “If there are these resistant shareholders, there constantly will be a pull and tug associated with decision making,” he said.

The tender offer deadline for Danisco shareholders was extended to May 13 from April 29. So far, 48% of Danisco shares have been voted in support of the deal, the companies said.