Canexus, Chemtrade in friendly talks after hostile bid
By John Tilak
TORONTO (Reuters) - Canadian chemical company Canexus Corp CUS.TO, which rejected a hostile bid from Chemtrade Logistics Income Fund CHE_u.TO, confirmed on Tuesday that it is in talks with the company about a higher offer.
Chemtrade, a supplier of industrial chemicals, has increased its takeover offer to C$1.65 per share, Canexus said in a statement. Reuters had earlier reported the discussions.
Canexus rebuffed a C$1.50-per-share unsolicited offer in October, saying the C$297.2 million bid undervalued the company. Chemtrade initially offered C$1.45 per share. The stock closed at C$1.62 on Tuesday.
There is no assurance that the discussions will result in a deal, both companies said in separate statements.
A deal for Canexus to be acquired by Canadian chemical maker Superior Plus Corp (SPB.TO: Quote) fell through earlier this year.
Calgary-based Canexus has come under pressure from different quarters. Stirling Funds, a major shareholder, criticized Canexus for not considering the Chemtrade offer.
In September, Stirling released an open letter saying Canexus "has ostensibly not explored this interest and rather it has embarked on a convertible debenture making the company less attractive to potential suitors thereby destroying shareholder value."
Stirling owns 14.2 percent of Canexus, according to Thomson Reuters data, and has been boosting its stake. Continued...