Japanese chemical firm bids in U.S.

Press, 27 June 1987, Page 29

Japanese chemical firm bids in U.S.

NZPA-Reuter New York

Dainippon Ink and Chemicals Inc, an aggressive Japanese speciality chemicals concern that last year bought a big American chemical business, has made a bid of about SUS 473 million (SNZBOI.6 million) for Reichhold Chemical Inc. Wall Street, which learned of the $U552.50 a share offer in an unheralded newspaper advertisement, drove Reichhold shares up $U517.25 on Thursday (early yesterday New Zealand time), taking the market price well beyond the Japanese offer to $U559.50 in heavy trading. The reaction indicated speculation that others may try to buy Reichhold, analysts said. “Apparently the arbitragers like this action,” one trader said, referring to professional stock-market speculators. Reichhold, based in the New York suburb of White Plains, and a manufacturer of a wide array of speciality chemicals,

adhesives and resins, said in a statement it was considering the Dainippon offer. A spokesman would not comment further and would not say if the offer had been solicited. Dainippon, one of the world’s leading suppliers of printing ink, last year bought the prized graphics-arts materials group of Sun Chemical Corp, for SUSSSO million after months of manoeuvring in one of the few contested takeovers ever tried by a Japanese corporation. A few months later, in December, Dainippon bought the printing-inks division of the Ault and Wiborg Group of Britain for SUS 26 million. Reichhold had net income of SUSIS.9 million last year on revenues of 5U5565.6 million, mostly from its polymer division. The company has some 50 plants in 24 U.S. states and 16 countries, with overseas sales last year providing a third of revenues. Many Reichhold products are used in

manufacturing of such things as appliances and construction supplies. Dainippon said it already owns about 4.5 per cent .of Reichhold’s common stock and that it will borrow up to SUS46O million to carry out the acquisition. It said, in a government filing in Washington, that it expected bank approval of the necessary loans promptly. Dainippon did not disclose any specific measures it would take if successful in acquiring Reichhold. Reichhold chairman and president C. Robert Powell urged shareholders to put off any action until the offer could be reviewed by the company and its advisers, The First Boston Corp, investment bank and the Sullivan and Cromwell law firm.

The offer, based on the total number of outstanding Reichhold common shares, would have a total value of about SUS 473 million, Dainippon said.