Basf (NYSE:BF)
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Engelhard Corporation (NYSE:EC), one of the largest
surface and materials science companies in the world, today announced
that it has entered into a definitive merger agreement under which
BASF (NYSE:BF) will acquire all the outstanding shares of Engelhard
for $39 per share in cash, giving the transaction a total net equity
value (including stock options net of strike price) of approximately
$5.0 billion and a total enterprise value of approximately $5.6
billion including net debt.
Engelhard's Board of Directors unanimously approved the merger
agreement and recommends all Engelhard shareholders tender their
shares into BASF's tender offer.
Under terms of the merger agreement, BASF will amend its $39 per
share tender offer to provide a greater degree of certainty to
Engelhard shareholders than would have been the case had shareholders
tendered their shares into BASF's earlier unsolicited offer, which
contained numerous conditions that are not included in the merger
agreement.
Engelhard's board will withdraw the company's $45 per share
self-tender offer for 20% of the company's shares and will adjourn the
Annual Meeting of Shareholders scheduled to take place on June 2, 2006
to June 30, 2006.
"Our board has determined that the $39 per share offer provides
fair value to our shareholders, and the agreement paves the way for an
orderly and cooperative transaction," said Barry W. Perry, Engelhard's
chairman and chief executive officer. "Our ability to deliver this
value would not have been possible without the extraordinary efforts
of our employees, who stayed focused and demonstrated their dedication
and ingenuity by delivering outstanding results."
Engelhard will shortly mail its formal recommendation to its
shareholders that they tender into the offer at the same time BASF
mails its revised tender offer materials.
Merrill Lynch & Co. is acting as financial advisor to Engelhard
and Cahill Gordon & Reindel LLP and Wachtell, Lipton, Rosen & Katz are
acting as legal advisors. Both Merrill Lynch and JPMorgan Chase & Co.
provided opinions to the Engelhard Board as to the fairness from a
financial point of view of BASF's $39 per share tender offer.
Engelhard Corporation is a surface and materials science company
that develops technologies to improve customers' products and
processes. A Fortune 500 company, Engelhard is a world-leading
provider of technologies for environmental, process, appearance and
performance applications. For more information, visit Engelhard on the
Internet at www.engelhard.com.
Forward-Looking Statements. This announcement contains
forward-looking statements. These statements relate to analyses and
other information that are based on forecasts of future results and
estimates of amounts not yet determinable. These statements also
relate to future prospects, developments and business strategies.
These forward-looking statements are identified by their use of terms
and phrases such as "anticipate," "believe," "could," "estimate,"
"expect," "intend," "may," "plan," "predict," "project," "will" and
similar terms and phrases, including references to assumptions. These
forward-looking statements involve risks and uncertainties, internal
and external, that may cause Engelhard's actual future activities and
results of operations to be materially different from those suggested
or described in this announcement. For a more thorough discussion of
these factors, please refer to "Forward-Looking Statements" (excluding
the first sentence thereof), "Risk Factors" and "Key Assumptions" on
pages 34, 35 and 38, respectively, of Engelhard's 2005 Annual Report
on Form 10-K, dated March 3, 2006.
Investors are cautioned not to place undue reliance on any
forward-looking statement, which speaks only as of the date made, and
to recognize that forward-looking statements are predictions of future
results, which may not occur as anticipated. Actual results could
differ materially from those anticipated in the forward-looking
statements and from historical results due to the risks and
uncertainties described above, as well as others that Engelhard may
consider immaterial or do not anticipate at this time. The foregoing
risks and uncertainties are not exclusive and further information
concerning Engelhard and its businesses, including factors that
potentially could materially affect its financial results or
condition, may emerge from time to time. Investors are advised to
consult any further disclosures Engelhard makes on related subjects in
Engelhard's future periodic and current reports and other documents
that Engelhard files with or furnishes to the Securities and Exchange
Commission ("SEC").