DuPont Co. said increasing its takeover bid for food-ingredients maker Danisco A/S by 5.3 percent to 33.4 billion kroner ($6.64 billion) has won the support of additional Danish institutional investors.
As many as 10 institutional investors, some of whom haven’t made public statements, have told DuPont they will accept the April 29 offer of 700 kroner a share, which is up from a Jan. 9 bid of 665 kroner, DuPont Chief Financial Officer Nicholas Fanandakis said today in a telephone interview. He declined to say how many shares the investors control.
“Since we have revised the offer, you have had all the Danish institutional investors come forward in support of the new offer and express their commitment to tender,” Fanandakis said. “It seems to have had a dramatic impact on the tone and the receptivity to the offer.”
DuPont, which is based in Wilmington, Delaware, and is third-biggest U.S. chemical maker, wants to buy Copenhagen-based Danisco to gain production of food additives and enzymes used in biofuels. After 48 percent of Danisco shares were tendered into the original offer, DuPont on April 29 raised the bid and lowered the minimum number of shares it’s seeking to 80 percent from 90 percent previously. Danish regulations prohibit further changes, Fanandakis said.
“If it does not close, then we would look to end the tender offer and execute on the growth strategy that we have,” Fanandakis said.
If the deal closes with less than 90 percent of shares, DuPont would have to keep Danisco as a separate entity, including maintaining its stock listing, Fanandakis said. DuPont would buy shares in the open market and approach individual investors, he said. DuPont couldn’t force holdouts to sell at the tender price in a so-called squeeze out until it held 90 percent of shares, he said.
Royal DSM NV said yesterday it sold its 4.95 percent stake in Danisco A/S to DuPont. Pension fund ATP, which has a 5.1 percent stake, endorsed the higher bid when it was announced. Danske Capital, Nordea Investment Management, Nykredit Asset Management and SEB Asset Management are among other funds supporting the revised bid, Michael Hanretta, a DuPont spokesman, said today in an e-mail.
No ‘Material Impact’
Elliott Associates LP, a New York-based hedge fund that has a 5.05 percent stake in Danisco, had said the original offer was too low. It hasn’t commented on the revised bid, which expires May 13. Scott Tagliarino, a spokesman for Elliott, declined to comment today when reached by telephone.
While closing the transaction with less than 90 percent would have tax and regulatory implications, such an outcome wouldn’t significantly hurt the company’s cost-savings and growth targets for the deal, Fanandakis said.
“It won’t really have any material impact at all on the financials,” Fanandakis said.
DuPont said Jan. 10 it planned to use $3 billion of cash on the acquisition and will finance the rest with debt. The company said it will assume net debt of about $500 million. The transaction will add to earnings starting next year, DuPont has said.
Danisco rose 1 krone to 697.5 kroner today in Copenhagen. DuPont fell 72 cents, or 1.3 percent, to $55.47 at 4 p.m. in New York Stock Exchange composite trading.
DuPont plans to expand beyond stalwarts such as Kevlar bullet-resistant fabric and titanium-dioxide pigment used in paint. Danisco is the world’s largest food-ingredients maker, producing sweeteners and cultures used in ice cream and cheese, and it is second behind Denmark’s Novozymes A/S in industrial enzymes. Danisco and DuPont already share a venture that makes ethanol from corn cobs and switchgrass.
The deal would be DuPont’s largest takeover since the 1999 acquisition of genetically modified seed-maker Pioneer Hi-Bred International Inc. for $7.7 billion.
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