Covestro wants to start negotiations with the takeover candidate ADNOC from Abu Dhabi.
As the DAX group announced, these discussions should be conducted in an open-ended manner. “Whether, in what form and under what conditions an agreement will be reached between the discussion partners is an open question and will depend on the course of the upcoming discussions,” said Covestro.
“ADNOC’s interest in our company underlines our strong position as one of the world’s leading manufacturers of high-quality plastics and as a pioneer on the path to a circular economy,” said CEO Markus Steilemann, according to the statement.
The Bloomberg news agency reported on a supervisory board meeting at Covestro in the afternoon, in which the supervisory body was supposed to decide on negotiations with Abu Dhabi National Oil Co (ADNOC). The share then rose and closed with a gain of almost 8 percent at 51.50 euros.
This was preceded by weeks of discussions between the companies’ advisors about a possible transaction in which Covestro could be valued at 11.6 billion euros or more, according to Bloomberg. ADNOC is said to have recently submitted an improved bid of 60 euros per share.
As Covestro further announced, in addition to an agreement on the commercial and legal transaction parameters, the approval of the respective committees of the companies and approval by the responsible authorities would also be necessary.
The company further emphasized that the discussions would particularly focus on securing the further implementation of the future- and sustainability-oriented corporate strategy, including corresponding regulations on corporate governance. “Regardless of the discussions with ADNOC, we will continue to fully concentrate on implementing our successful ‘Sustainable Future’ strategy in order to develop our full potential and further advance the transformation to a circular economy,” continued CEO Steilemann.
No further communication on the negotiations is currently planned, unless it is necessary due to disclosure regulations.
Chemical union insists on securing Covestro employees
Against the background of the takeover talks, the chemical union IG BCE insists on securing jobs: “For the Covestro employee representatives and the IG BCE, it is crucial that the group is now made sustainable for the future. This applies above all to locations and employment “, said the IGBCE spokesman to the Rheinische Post. “We are committed to this.” At the same time, the spokesman emphasized that they would not take part in capital market speculation.
According to previous information from Covestro, employees in Germany are protected from operational dismissals until the end of 2028. Covestro has 18,000 employees, around 7,000 of them in North Rhine-Westphalia. On Friday, Covestro decided to start negotiations with the Arab investor Adnoc.
Baader Bank leaves Covestro on ‘Add’ – target 53 euros
Baader Bank has left the rating for Covestro at “Add” with a price target of 53 euros. This could increase the chance of a takeover, which he had previously estimated at 30 percent, wrote analyst Markus Mayer on Monday in his reaction to officially confirmed talks with Abu Dhabi National Oil (Adnoc). Mayer considers the long-term story of the plastics company to be very interesting and had already seen it as one of the key takeover candidates in the European chemical industry.
Covestro remains in demand thanks to takeover fantasy
In view of Covestro’s open-ended discussions with Abu Dhabi National Oil (Adnoc), investor interest in the plastics company remains high. Deutsche’s shares extended their strong price gains from Friday at the beginning of the week and rose by up to 4 percent to 53.56 euros via XETRA. With a price increase of 12 percent in two trading days, they have reached another high since February 2022.
In his commentary on the talks officially confirmed on Friday, analyst Christian Faitz from Kepler Cheuvreux recalled that at the beginning of August he had already mentioned a takeover price of 70 euros as a fair level for a strategic investor.
FRANKFURT (Dow Jones) / MUNICH / FRANKFURT (dpa-AFX Broker)
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