Innospec eyes £1bn chemistry with UK rival Elementis

A FTSE-250 chemicals company which last year rebuffed a series of takeover bids from across the Atlantic has received a fresh approach at a big premium to its current share price.

Sky News has learnt that Elementis, which makes chemicals used in products such as deodorants, has received an offer from Nasdaq-listed Innospec which values it at more than £1bn.

City sources said that both companies would come under pressure to confirm the approach in stock market announcements on Tuesday morning.

The disclosure will again raise questions about why the written offer from Innospec had not already been divulged to Elementis’s shareholders given the credibility of the bidder.

One investor suggested that the bid had been tabled in a mixture of cash and shares, and that it valued Elementis at more than 200p-a-share.

By comparison, shares in Elementis closed on Monday afternoon at just 135.7p.

The question of takeover disclosures has been fiercely debated in recent months following a number of corporate situations in which boards have refused to inform investors – even after rejecting multiple approaches.

On Sunday, Sky News revealed that the FTSE-250 support services provider Equiniti had received a fifth offer from Siris Capital.

None of the four previous approaches had been confirmed to the stock market, despite them being pitched at various levels above the prevailing Equiniti share price.

Both Siris Capital and Equiniti acknowledged the latest offer in statements on Monday morning.

A takeover of Elementis by Innospec would result in a small slice of Britain’s industrial history being absorbed by a bigger US rival.

The company was founded in 1844 by brothers Daniel and Smith Harrison, and Joseph Crosfield, to trade in tea and coffee.

The Innospec approach for Elementis follows a number of offers for the London-listed company late last year from Mineral Technologies, another US-based group.

The highest of those proposals was tabled at 130p-a-share and was roundly rejected by the Elementis board.

It was unclear on Monday whether Innospec’s offer had been flatly rejected or whether the suitor had been allowed to engage in talks with Elementis.

Innospec is more than double the size of Elementis in market capitalisation terms, with a value of around $2.55bn (£1.8bn).

Elementis had a market cap at Monday’s close of £783m.

The Nasdaq-listed company employs nearly 2000 people in 24 countries, and has a presence at Ellesmere Port in the north-west of England.

It operates in some of the same markets as Elementis, such as personal care and home care.

An Elementis spokeswoman declined to comment, while Innospec did not respond to an emailed request for comment.

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