BASF SE, the world’s biggest chemical maker, boosted its offer for Norwegian drug-ingredient maker Pronova BioPharma ASA by 8 percent to win support from investors holding out for more money.
BASF is now offering 13.50 kroner a share ahead of a Jan. 18 deadline, up from the 12.50 kroner it offered previously, the Ludwigshafen, Germany-based company said today in a statement. The new offer values Pronova at almost 5 billion kroner ($900 million), including debt. Pronova shares rose 6 percent to 13.35 kronor.
The move highlights the importance BASF is placing on building its Omega 3 fatty acid unit, balancing its desire for the asset with the risk of setting a precedent for future takeovers. Pronova would give the company access to the market for top-purity fatty acid used in blockbuster heart drugs such as GlaxoSmithKline Plc’s Lovaza and Abbott Laboratories’ Omacor.
“The outcome is still uncertain” as the acceptance requirement remains high at 90 percent, said Norbert Barth, an analyst at Baader Bank.
BASF has done about $24 billion in mergers and acquisitions in the past decade. Pronova’s board backed the previous offer.
Investors with as much as 20 percent of the Lysaker-based company were disgruntled, according to Alexandra Morris, a fund manager at Odin Forvaltning AS who said Jan. 7 that she had discussed the deal terms with others. Odin has a 4.7 percent stake and BASF is seeking 90 percent to gain full control.
Deeper Due Diligence
A fair price for Pronova would be closer to 20 kroner than to 10 kroner, Rolf Solgard, chief portfolio manager at Nykredit Asset Management, which has a 1 percent stake, said in an interview last week.
“Following a comprehensive due diligence review and taking into account the opportunities and foreseeable risks in Pronova’s business, this increased offer is our last, best and final offer,” Michael Heinz, a BASF board member, said in the statement.
BASF, which said today 70 percent of the shares have been tendered, won’t extend the offer period beyond this week’s deadline. It reiterated that the offer depends on getting 90 percent of the stock.
All shareholders will be entitled to receive the increased offer price for Pronova, except for Herkules Private Equity, which held about 50 percent of Pronova, BASF said.