BASF to acquire Engelhard

BASF has made an all-cash proposal to acquire Engelhard Corporation, an Iselin, NJ-based supplier of goods for catalysis and surface finishing, for $37 a share or $4.9 billion. This price represents a 23% premium above the Dec. 20, 2005 closing price of Engelhard’s stock of $30.05 and a 30% premium over Engelhard’s 90-day average share price (VWAP) of $28.42 as of Dec. 20, 2005. This price also represents a premium to Engelhard’s 2005 year-end closing price of $30.15 and to the four-year-high closing price of $32.49 achieved on July 14, 2004.
By acquiring Engelhard, BASF would become a leading provider in the worldwide catalyst market, according to the company. “Engelhard is an excellent enhancement for the BASF portfolio,” said Jürgen Hambrecht, chairman of the executive directors of BASF AG. “By combining the R&D activities of both companies, BASF would create a unique global technology platform for catalysts and open up further growth.
According to a statement released by BASF, the proposal reflects an opportunity for significant value for Engelhard’s stockholders: a robust premium over Engelhard’s current stock price; and a fully financed, all-cash transaction, with no significant regulatory hurdles anticipated based on present knowledge.
“We believe that our all-cash proposal provides a compelling opportunity to achieve significant value for Engelhard’s stockholders,” said Hambrecht. “We hope that Engelhard board and management will recognize this opportunity as well as the benefits for Engelhard’s employees. We look forward to continuing and strengthening business relations with Engelhard’s customers.”
BASF commenced a tender offer for all of Engelhard’s shares of common stock on January 9, 2006, which has been filed with the Securities and Exchange Commission together with all relevant tender offer documentation. The offer is subject to customary conditions, including that a majority of Engelhard’s shares of common stock, on a fully diluted basis, are tendered into BASF’s offer, and that Engelhard’s board takes all necessary actions to make its shareholder rights plan and the supermajority voting provisions in its certificate of incorporation inapplicable to BASF’s offer. BASF’s proposal is not subject to any financing condition.