DuPont nixes talk of higher Danisco bid

COPENHAGEN Thu Mar 17, 2011 10:35am EDT

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COPENHAGEN (Reuters) - U.S. chemicals group DuPont (DD.N) quashed talk that Danisco's DCO.CO forecast-beating results on Thursday would make it sweeten its bid for the Danish food ingredients and enzymes producer.

Danisco agreed in January to be acquired by DuPont for 665 Danish crowns per share, equal to 33.4 billion Danish crowns ($6.3 billion), plus the assumption of $500 million in debt.

"Our tender offer remains full, fair, and firm," DuPont chief executive Ellen Kullman said in an email statement provided to Reuters.

"Today's results are consistent with our expectations based on our due diligence," Kullman said. "Importantly, DuPont's offer for Danisco also fully anticipated the company's long-term outlook, which Danisco reaffirmed today."

Danisco said third-quarter profit was driven by a positive development in all its divisions, and some analysts said the strong result and upgraded outlook could make some Danisco shareholders less inclined to accept DuPont's offer.

Danisco reiterated that DuPont's bid was recommended by its board and said there had been no approach to Danisco by any other potential bidder since the DuPont offer was announced.

Chief Executive Tom Knutzen told Reuters the strong quarter did not change the "big picture" with regard to the DuPont offer, but he added that it was a "very likely scenario" that the offer period would be extended by four weeks.

Last month, DuPont extended its offer until April 1 after Danisco shareholders with only 5 percent of the stock accepted the bid. The deal requires acceptance by owners of at least 90 percent of the stock.

Earnings before interest and tax (EBIT) before special items rose to 518 million crowns ($97 million) in November through January from 339 million in the same quarter a year earlier.

The result beat estimates which had ranged between 437 million crowns and 505 million in a Reuters poll of banks and brokerages, whose average forecast was 468 million.

"It is a very strong result," said Alm. Brand analyst Michael Jorgensen said. "The good result could make people less inclined to sell, and believe that Danisco itself can create value in the longer run."

Sydbank analyst Morten Imsgard said: "Danisco investors could easily use the raised outlook in the negotiation process, but one needs to look at the longer-term value rather than for just one quarte."

"Danisco has for several quarters seen a positive development, but DuPont's offer reflects value and improvements for years ahead," Imsgard said.

Danisco bumped up guidance for its full-year EBIT before biochemical project (BCP) costs to more than 2.4 billion crowns from a previous forecast range of between 2.2 and 2.3 billion.

It said that would lead to a full-year EBIT margin (before BCP) of around 15.5 percent, up from its earlier forecast of around 14.5 percent. It nudged up 2010/11 revenue guidance to 15.5 billion crowns from 15.3 billion.

"We upgrade our EBIT outlook for the full year as a result of a faster-than-expected recovery in Sweeteners and the exceptional peak cycle performance in Enablers," Danisco said.

Enablers - the biggest division -- produces emulsifiers and gums used to thicken a variety of foods such as sauces and dressings, and accounted for 41 percent of group revenue in the third quarter.

Danisco shares up slightly at 661 crowns at 1430 GMT, underperforming the Copenhagen bourse .OMXC20 which rose 1.3 percent. (Editing by David Cowell) ($1 = 5.323 Danish crowns)

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