US chemicals giant Innospec has today pulled out of its pursuit of FTSE 250 firm Elementis after a $1.3bn (£930m) bid for the firm was rejected.
Last night Sky News reported that the US firm had tabled a bid for the fellow chemicals firm. In a statement after markets closed in the UK today, Elementis said that it had rejected the 160p per share offer.
Such a bid would have represented a healthy premium on Elementis’ closing price of 135p per share today.
In a statement, the board of the FTSE firm said: “The board concluded that the Conditional Proposal significantly undervalued Elementis and fell meaningfully short of the value creation potential for Elementis shareholders based on Elementis’ existing strategy.”
In a SEC filing, Innospec confirmed that it was “no longer” considering the acquisition.
It added: “Innospec believes the combination of the companies would have created benefits for both sets of shareholders given the compelling strategic fit.
“The 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.”
Innospec first made its bid on 31 March, with the offer rejected on 9 April. There have been questions as to why Elementis’ shareholders were not made aware of the bid prior to today.
Last year Elementis was the subject of a takeover pursuit by another US firm, Mineral Technologies.
The New York-based firm made a number of bids for the FTSE 250 group, with a top offer worth 130 per share. However, this was rejected by Elementis’ board.