US Fund KPS explored takeover offer for UK's Elementis –sources
25/01/2024 09:03
(In JAN 24 story adds shares, paragraph 4)
By Amy-Jo Crowley and Emma-Victoria Farr
LONDON, Jan 24 (Reuters) - KPS Capital Partners recently
explored a bid for UK specialty chemicals maker Elementis
ELM.L but has since paused its work, two people familiar with
the matter told Reuters.
The New York-based private equity firm in December submitted
an offer valuing the FTSE 250 company at about 160p per share,
but the Elementis board wanted around 180p, one of the people
said.
Spokespeople for Elementis and KPS declined to comment.
Shares in Elementis, which makes a range of chemical and
personal care products, rose by as much as 10.5% in early
trading in London on Thursday. By 0847 GMT, they were up 8.1% at
134 pence, making them the biggest percentage gainer on the FTSE
350 index. Elementis closed at 125 pence on Wednesday, giving it
a market value of 735 million pounds.
Elementis has already rebuffed other takeover bids, in 2020
from US-based Mineral Technologies and in 2021 from
Nasdaq-listed Innospec.
It follows disappointment from shareholders in Elementis in
recent months over the firm’s performance.
New Jersey-based Franklin Mutual Advisors, which has an
about 9.2% stake in Elementis, in September urged the board to
find a buyer for the company.
It criticised the company’s "stagnant" share price and
recent "value destructive acquisitions", which it said had
undermined confidence in management's ability to drive growth.
Odyssean Capital, which has an about 3.1% stake, and
Schroders Investment Management, which owns about 3.8%, backed
the request to put the company up for sale, The Times reported.
Elementis rebuffed the calls saying that an immediate sale
of the chemicals group was not ideal given the "substantial
value still to be realised."
In its latest trading update, Elementis said it expects
adjusted operating profit to be between $102-104 million for
2023, up from $100.5 million a year earlier. It added it remains
focused on achieving an operating margin of above 19% by 2026
and its target of below 1.5 times net debt and core profit.
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UK-based Elementis resists key shareholder's call for immediate
sale urn:newsml:reuters.com:*:nL8N3AW3GB
BUZZ-UK's Elementis up after upbeat profit forecast
urn:newsml:reuters.com:*:nL4N3E826A
BRIEF-Elementis Expects FY Adj Operating Profit To Be In Range
Of $102-104 Mln urn:newsml:reuters.com:*:nTUC1CYYDD
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(Reporting by Amy-Jo Crowley and Emma Victoria Farr, Editing by
Anousha Sakoui and Nick Zieminski)
((Amy-Jo.Crowley@thomsonreuters.com;))