Chemical Stocks Surge on Takeover Speculation

Strategic Insights -

The UK chemical sector saw significant gains yesterday, driven by takeover speculation and rumors of potential acquirers. BTP, in particular, saw its shares skyrocket 28% to 361p, the second-best performance among the UK's 250 largest companies, as Swiss chemicals group Clariant was linked to a possible takeover bid. Clariant has been eyeing a UK acquisition for some time and was previously linked to Laporte over a year ago. Analysts caution that a takeover would likely involve a high price, with estimates suggesting Clariant would need to pay north of 600p to persuade BTP and its shareholders.

Key Takeaways:

  • BTP's shares rose 28% to 361p, driven by speculation of a Clariant takeover bid.
  • Clariant has been linked to a UK acquisition for over a year and was previously mentioned as a potential buyer of Laporte.
  • Analysts estimate Clariant would need to pay north of 600p to acquire BTP.
  • Other potential targets, such as Croda and Laporte, also saw gains, with Croda up 13% and Laporte 4% higher.
  • BP Amoco, the UK's largest quoted company, was steady despite previous concerns about a substantial short position in the stock.
  • The deal between BP and Arco is facing regulatory hurdles, with the US regulator showing no sign of approval.

Statistics:

  • BTP shares gained 28% to 361p, the second-best performance among the UK's 250 largest companies.
  • Clariant has been linked to a UK acquisition for over a year.
  • Analysts estimate Clariant would need to pay north of 600p to acquire BTP.
  • Croda shares rose 13% to 295.5p.
  • Laporte shares gained 4% to 524p.
  • BP Amoco shares ticked higher despite concerns about a short position, finishing steady at 596p on heavy turnover of 30m shares.

Sources:

  • Financial Times Limited 1999.