Ferro rejects Schulman offer bid

US compounder A. Schulman offered to buy speciality chemicals firm Ferro Corp for US$563 million, but the latter rejected the bid saying it was better off on its own. According to analysts, Ferro may be hoping that Schulman will better the offer or that another firm will come along to make an offer.

A. Schulman expressed its intent to buy Ferro in a letter on February 13, but was rejected by the Ohio-based company. A. Schulman first contacted Ferro in November 2012. Ferro advised shareholders on Monday not to take any action and said Goldman Sachs & Co was advising the company.

"A. Schulman and Ferro are both recognised leaders in speciality chemicals with value-added product lines, similar business models, complementary competencies, markets and applications," said Schulman Chairman Joseph Gingo. He went on to say that the firm believes the combination will “deliver superior value to respective shareholders and offer better value to customers." Gingo also said, “We request the Ferro board to reconsider their expressed position to remain independent. We also encourage Ferro shareholders to communicate with their Board, and ask them to re-examine their decision regarding our offer. We believe that our offer will bring attractive and timely value creation to both Ferro and A. Schulman shareholders.”

Early this year Ferro sold assets related to its shrinking business that made conductive pastes used in making solar cells to Germany-based precious metals and technology company Heraeus for an undisclosed sum. It also said it would cut about 120 jobs in Europe as a result of having posted a loss of US$316 million last quarter.


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