Doubts linger as EU clears Dupont's Danisco buy
DuPont faces a tough task to convince shareholders of Danish group Danisco to accept its $6.4 billion offer, even after it cleared another hurdle by gaining European Union approval for the deal.
The U.S. chemicals group said on Tuesday the European Commission had approved its tender offer for Danisco, the Danish food ingredients and enzymes maker, and it expected to close the transaction this month.
DuPont and Danisco announced the agreed takeover in January, but acceptance by Danisco shareholders of the 665 Danish crowns per share offer worth 33.4 billion Danish crowns ($6.4 billion) has been sluggish while regulatory hurdles have been pending.
DuPont has twice extended the offer, most recently on March 30, when it prolonged it to April 29 after Danisco shareholders with only 6 percent of the stock had accepted the bid.
That was far below the 90 percent acceptance that DuPont requires to complete the deal and delist Danisco.
The European Commission said in a statement on Tuesday that it granted clearance after examining the deal under its simplified merger review procedure. That means that the transaction did not raise competition concerns.
Only Chinese approval now remains as a regulatory condition of closing, DuPont Chief Executive Ellen Kullman said.
We remain confident that Danisco shareholders will follow their board's recommendation to accept our premium cash offer, and the transaction will be completed later this month, Kullman said in the statement.
But analysts said DuPont would still have an uphill battle to carry out the deal.
I think they will have difficulties obtaining the 90 percent (acceptance level) with the current bid, Handelsbanken Capital Markets analyst Dan Togo Jensen said.
They would get a better chance if they raised the bid because of the stronger-than-expected underlying performance of Danisco, Jensen said, adding he also expected there was a chance DuPont would raise its offer.
The U.S. company has repeatedly said it will not raise the bid, which it has called full, fair and firm.
Competition approval for the deal has been obtained in the United States.
Shares in Danisco, which have traded slightly below the offer level since it was launched, were off 0.08 percent at 663.50 crowns at 1119 GMT.
(Reporting by John Acher; Editing by Mike Nesbit and Erica Billingham)
($1=5.257 Danish crowns)
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