First Reserve Corp., a private- equity firm focused on energy and natural resources, is in exclusive talks to buy chemical maker TPC Group Inc. (TPCG), said a person with knowledge of the matter.
The companies are weeks away from an agreement, said the person, who asked not to be named because the discussions are private. The deal could fall through, the person said. A buyout of Houston-based TPC may fetch about $40 a share, or more than $600 million, not including debt, a person familiar with the talks said last month.
A deal for TPC could represent a bet by First Reserve that natural-gas prices will remain low, leading to a scarcity of butadiene, a component of synthetic rubber of which TPC is the largest producer. Low gas prices have prompted producers to use the fuel to make ethylene, a process that creates less butadiene as a byproduct than other methods.
Sara Cronin, a TPC spokeswoman, and Lisa Cradit, a spokeswoman for Greenwich, Connecticut-based First Reserve, declined to comment.
Previous negotiations to acquire TPC, which included chemical makers and buyout firms, collapsed earlier this year after the company’s stock price jumped, people familiar with the matter said last month. TPC fell 0.1 percent $38.62 at 12:40 p.m. New York and had advanced 66 percent this year through yesterday.
First Reserve, founded in 1983 and led by Chairman and Chief Executive Officer William Macaulay, typically focuses on buyouts in the oil and gas, power, infrastructure and mining industries. Some of its biggest deals include the acquisition of Abbot Group Ltd., the Scottish oil-services firm, and an investment in Glencore International Plc (GLEN), the Swiss commodities trader.
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