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Printed Electronics World
Posted on October 6, 2008 by  & 

BASF publishes offer to Ciba shareholders

BASF, Germany and Ciba Holdings, Switzerland who have both extended their portfolio into printed electronics may now combine there expertise with a planned public takeover offer to Ciba's shareholders by BASF.
For each nominal share in Ciba BASF will pay CHF 50.00 in cash. BASF and Ciba have reached a transaction agreement in which the Board of Directors of Ciba supports BASF's attractive offer and recommends its acceptance to Ciba's shareholders. The offer corresponds to a premium of 32 percent above the closing price for Ciba's shares on September 12, 2008 and a premium of 60 percent above the volume-weighted average share price for Ciba shares in the 30 days prior to announcement of the public takeover offer. Based on all outstanding Ciba shares and including all net financial liabilities and pension obligations, the enterprise value would be CHF 6.1 billion (approximately €3.8 billion).
"With the acquisition of Ciba, we are strengthening our portfolio and expanding our leading position in specialty chemicals with products and services for a variety of customer industries, in particular the plastics and coatings industries as well as water treatment. In paper chemicals, we will intensify the urgently needed restructuring process and become the leading supplier with an extensive portfolio. We will grow profitably in accordance with our clear and successful strategy. The transaction meets our acquisition criteria. We expect that it will make a positive contribution to earnings per share in the second year," said Dr. Jürgen Hambrecht, Chairman of the Board of Executive Directors of BASF SE. "Our attractive cash offer gives Ciba shareholders the opportunity to realize the full value of their investment plus a high premium immediately," he added.
Although Ciba's performance has disappointed analysts and investors particularly in the second quarter of 2008, BASF state that they recognize the strength of broad areas of Ciba's portfolio and believe that the integration of Ciba's activities into BASF will give the business sustainable strength and offer BASF a long-term perspective for profitable growth.
The merger of the activities of BASF and Ciba would extend BASF's leading position as a preferred supplier to the plastics industry and make BASF the second-largest supplier of coating effect materials. In the fast-growing and highly profitable market for plastics additives, BASF would expand its portfolio by gaining important product segments such as UV stabilizers and antioxidants. In the area of coating effect materials, the combination of BASF and Ciba would offer an extensive range of pigments, resins and additives.
The public takeover offer is subject to several conditions, which are described in detail in the offer prospectus. BASF has set the minimum acceptance threshold to 66.67 percent of all nominal shares. The transaction is also subject to the approval by the relevant authorities as well as the removal of various takeover defenses in Ciba's statutes.
If the minimum acceptance threshold is reached, it is currently planned to convene an extraordinary shareholders' meeting of Ciba Holding AG, which is required for a change of the statutes, at the end of November or in early December 2008.
BASF expects to finalize the transaction in the first quarter of 2009 at the latest.

Authored By:

Business Development Director, Research

Posted on: October 6, 2008

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