DuPont raises Danisco offer and sets final deadline

DuPont’s offer to acquire Danisco was announced in January, for DKK665 per share. Although Danisco’s board approved the offer, many shareholders have been less eager and many have been holding out for a higher price. The deadline for 90 per cent of shares to be tendered had already been extended twice before Friday.

The increased offer, as well as the lowering of the minimum number of shares to be tendered, came 15 minutes before the latest deadline was due to expire. DuPont estimates that only around 48 per cent of Danisco’s shares had been tendered up to that point.

Early indications are that the new offer is more acceptable to some major shareholders: Danish pensions fund ATP, which holds 5 per cent of shares, has signaled its support of the higher price.

The new offer was forthcoming after discussions between DuPont and ATP’s head of Danish equities, Claus Wiinblad.

“Best and final” ​

DuPont chair and CEO Ellen Kullman said in a statement: “These terms represent our best and final offer. This increase in the offer price and reduced minimum tender requirement will allow shareholders to tender with confidence, given the premium value and certainty of this offer.” ​

Kullman had previously said DuPont would not up the price it was prepared to pay, calling the initial offer "full, fair, and firm”. ​

She has now said the May 13 deadline is final, and if the new offer does not meet with shareholder agreement DuPont will end its offer and “continue executing [its] successful growth strategy, and explore other paths for achieving the benefits that Danisco would have offered us”.​

The final offer deadline is also in keeping with the rules of the Danish financial market authority, Finanstilsynet, which allows for no more than three extensions.

No word from Elliott ​

Also on Friday Danisco reported that it had received information from Elliott International, a US hedge fund group, that it had increased its stake in the company to 5.05 per cent, putting it on a par with ATP as one of the two largest shareholders.

Elliott had said that the initial offer was too low, and prior to Friday’s raised offer it signaled that it would not tender any shares, according to The Financial Times.​ It has not made any comment on whether the revised price is deemed acceptable, however, and the amassing of a higher stake has been called a strategy to increase the pressure for a higher offer.

But according to a commentary by Flemming Emil for the Wall Street Journal, its agreement may not be that critical.

“Regardless of Elliott's view on the new offer, however, ATP's backing and the lowered acceptance rate condition, has made it considerably more difficult for unhappy investors to block the deal.”​

Shareholders who had previously tendered their shares at the lower price per share will automatically receive the new price if the revised offer is completed.