Rival bid for Amcol trumps $1.6bn offer
The battle to acquire Amcol International, the US minerals and materials group, is set to resume this week with domestic rival Minerals Technologies lining up a bid that would value the business at between $1.6bn and $2bn.
Amcol last week agreed to be bought by Imerys, the French materials group, for $42.75 a share, implying a value of $1.6bn including debt. Minerals Technologies is preparing to trump that offer, however, and could make public its bid as early as Monday, according to people familiar with the process.
The competition for Amcol reflects the Illinois-based group’s large reserves of bentonite – a versatile mineral used in the construction and energy industries. The company, which employs 2,800 people, also has a transport division.
The Imerys offer, which has been approved by Amcol’s board, is $0.25 a share higher than the original bid by Minerals Technologies. The price is also 4.3 per cent higher than Imerys’s initial $41 a share offer.
It is unclear how much higher Mineral Technologies is planning to go. The company and its advisers, Lazard and Cravath, declined to discuss the matter.
Bentonite is formed through the weathering of volcanic ash, with exposure to water turning the rock dust to highly absorbent clay. The material is used for landfill lining, walling and as lubrication for drilling machines. Besides industrial uses, bentonite is found in cat litter and has been used as a laxative. Amcol began processing the material in 1928.
In announcing the takeover deal on February 12, Gilles Michel, chief executive of Imerys, said it was a “very important milestone” that will allow the company “to strengthen its presence in the US, to be more innovative, and to enhance its growth profile”.
Amcol, which is being advised by Goldman Sachs and Kirkland Ellis, has operations in 26 countries and would help Imerys offset the sluggish demand in European construction markets.
Imerys’ bid, the second to be accepted by Amcol’s board, is not dependent on any financing.
Analysts have been positive about the impact such a takeover would have for the Imerys share price. However, some have questioned a decision that marks a deviation from M&A strategy by the French group.
Analysts at Société Générale said in a recent note that the price, which implies a multiple of 11.3 times the 2013 expected earnings before interest, tax, depreciation and amortisation, was “far above the multiples the group has tended to pay in the past”.
Amcol’s shares have risen by 30 per cent since the start of February and closed at $44.38 on Friday.