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Clariant eyes $1.5B UK bid
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January 20, 2000: 6:23 a.m. ET
Swiss chemical giant in talks to buy Britain's BTP; rivals may emerge
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LONDON (CNNfn) - Shares of diversified U.K. chemicals firm BTP soared Thursday after it revealed it was in takeover talks with Swiss specialty-chemicals maker Clariant. BTP leapt on the prospect of a $1.6 billion bid, while analysts suggested a rival bidder might emerge.
A deal would give Clariant a valuable foothold in the U.K. market. The Basle-based company's move reflects consolidation among producers of raw materials for drugs, even as the pharmaceutical sector itself is undergoing a wave of mergers and takeovers.
BTP (BTP), which makes products including ingredients for Pfizer's blockbuster anti-impotence drug Viagra, soared 26 percent to 487 pence in morning trade in London, after peaking at 513 earlier in the session. It revealed it was talking to Clariant Wednesday after share trading closed. Earlier in the day, BTP stock has risen 12 percent amid speculation about an offer from Clariant.
Analysts speculated that Clariant would make a cash bid at about 600 pence a share, valuing BTP at 890 million pounds ($1.47 billion). "That is the top end of expectations, " said Peter Cartwright, a chemicals analyst at Williams de Broe in London, noting that competition for the remaining U.K. independent chemicals producers had led to hefty premiums in past deals.
Cartwright said a European or U.S. chemical firm might still enter the race for BTP, citing Germany's BASF (FBAS) and Degussa-Huels (DGU) as possible contenders.
The Swiss company - the world's largest specialty chemicals producer with sales of $6.9 billion last year - declined to comment on BTP's statement. Its shares fell 1.8 percent in Zurich.
The U.K. company is the world's third-largest producer of "fine chemicals", ingredients used in the drug and agrochemicals industry. It posted a pre-tax profit of 53.6 million pounds on sales of 374.2 million in the year to March 31, 1999. Its shares sagged in the second half of the year after a profit warning.
For Clariant, the approach to BTP marks its second foray into the U.K. market: it tried and failed to acquire Laporte (LPRT), another diversified chemicals group last year.
The deal foundered on opposition from Germany's Hoechst - Clariant's biggest shareholder at the time. Hoechst has since sold its 45 percent stake in Clariant in the course of its merger with France's Rhone-Poulenc to form Aventis. 
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