EU approves DuPont-Danisco offer – but it’s far from a done deal

04-Apr-2011 - Last updated on 05-Apr-2011 at 15:23 GMT

The EC approves DuPont's offer, but do Danisco shareholders?

The European Commission today approved DuPont’s €4.5bn offer for Danish probiotics, enzymes and ingredients giant Danisco but the deal remains in doubt as to date only 6% of Danisco shareholders have accepted the offer.

DuPont requires another 84% of Danisco stockholders to sell at the offer price of 665 Danish crowns (€89.17 at today’s rates) to complete the acquisition, but many are expressing discontent at the offer price that has twice forced DuPont to extend the offer announced on January 10 this year.

In a statement today heralding the EC approval, Dupont called its proposal a, “premium cash offer”.

"We are pleased to have achieved one of the last important milestones in the pending acquisition of Danisco," said DuPont chair and chief executive officer Ellen Kullman of the EC approval.

"Only Chinese approval now remains as a regulatory condition of closing. 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."

But despite such overtures and the backing of the deal by the Danisco board, the majority of shareholders are refusing to sell, although the latest deadline does not expire until the end of this month.

While many analysts initially went on the record stating the price was a good one for Danisco shareholders, their reticence has convinced some market watchers that DuPont may have to up its bid if it wants the takeover to proceed.

"I think they will have difficulties obtaining the 90 percent (acceptance level) with the current bid," Handelsbanken Capital Markets analyst Dan Togo Jensen told Reuters.

"They would get a better chance if they raised the bid because of the stronger-than-expected underlying performance of Danisco."