BASF
shares fall after report it is weighing DuPont bid
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[March 07, 2016]
FRANKFURT (Reuters) - Shares in BASF <BASFn.DE>
fell after a media report that the world's top chemicals group by sales
was evaluating a counter bid for DuPont, which late last year agreed to
merge with Dow Chemical .
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BASF shares traded 2.3 percent lower, one of the biggest decliners
among German blue-chips, with traders citing a report by Bloomberg
that the company was working with banks and advisers to examine the
merits of such a move.
The market reaction was characterized by a mixture of scepticism
about whether BASF would follow through with a bid and concerns
about it getting dragged into a potentially expensive takeover
battle.
"We just don't see it," Bernstein analysts wrote in a note.
"We think BASF cannot come up with a more attractive offer than the
current Dow-DuPont transaction," they said, adding BASF would
struggle to raise the expected $72 billion for DuPont.
BASF declined to comment.
DuPont and Dow Chemical in December agreed to combine in an
all-stock merger valued at $130 billion, combining two of the
biggest and oldest U.S. chemical producers.
"BASF joining the race for DuPont would potentially overstretch
BASF's balance sheet, we think," Equinet analyst Michael Schaefer
wrote.
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The report comes less than two weeks after BASF Chief Executive Kurt
Bock dismissed suggestions that the group needed to pursue large
deals to transform its diversified chemicals and oil business.
In contrast to his predecessor Juergen Hambrecht, now the
supervisory board chairman, Bock has eschewed major takeover deals
at the group's core chemicals and plastics businesses during his
almost five-year tenure, which has seen cutbacks and divestments.
(Reporting by Christoph Steitz, Ludwig Burger, Arno Schuetze and
Patricia Weiss; Editing by Harro ten Wolde and Keith Weir)
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