Lonza chairman rejects takeover talk - paper

Sun Oct 28, 2012 5:40am EDT

* Shares had jumped on takeover talk

* Job cut announcement set for Q3 earnings on Wed - paper

ZURICH Oct 28 (Reuters) - Swiss drug industry supplier Lonza has not been engaged in any takeover talks with a potential buyer, its chairman was quoted as saying on Sunday.

"The rumours have been plucked out of thin air. There are and were no talks, not to mention negotiations," Chairman Rolf Soiron told the SonntagsZeitung newspaper. "Lonza should maintain its independence."

Lonza shares jumped last month on speculation that Saudi Basic Industries Corp (SABIC) or Germany's BASF might have switched takeover interest to the Swiss firm from Britain's Yule Catto & Co.

Another newspaper, Der Sonntag, reported that Lonza was set to announce unspecified job cuts when it reports third-quarter earnings on Wednesday as the strong franc and price falls are putting pressure on the profitability of its main plant in Visp.

The company was not immediately available for comment.

New Chief Executive Richard Ridinger said in July that while the company's focus in the past was on dealmaking, it would now concentrate on delivering promised operational improvements. A review of Lonza's structure and business models is ongoing with further job cuts a possibility.

The company ousted former CEO Stefan Borgas in January after 2011 profit plunged by one third.

Lonza's shift into specialty chemicals with the $1.2 billion purchase last year of U.S. biocide company Arch Chemicals has made it less dependent on volatile orders from drugmakers but the move back to a lower-margin business has hurt earnings.

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