* Potential offer at $44 to $46 per share in cash
* TPC says will consider the non-binding proposal
* Shares of TPC closes 12.8 pct higher
Oct 8 Chemicals maker TPC Group Inc on
Monday said it received a buyout proposal from Innospec Inc
worth as much as $721 million, topping an offer from
two private equity firms made in August.
Private equity firms First Reserve Corp and SK Capital
Partners in August had offered $627.2 million to acquire TPC.
The deals pit the private equity industry's desire to expand
into a high-margin sector against a chemical industry veteran's
attempt to expand.
TPC's main product is butadiene, used to make synthetic
rubber for tires and other automotive products. But weak demand
has pressured its business this year as prices for butadiene
have fallen sharply, causing a trough in TPC's market.
Innospec, a specialty chemical maker, could offer $44 to $46
per share in cash, TPC said in a statement on Monday.
First Reserve and SK Capital offered $40 a share in late
TPC shares have consistently traded above the $40 price
offered by the private equity firms, and at least two of TPC's
top-10 shareholders have said they will vote against the deal.
"We urge TPCG to abandon the First Reserve deal, pursue the
Innospec bid and solicit interest from other potential buyers in
a full-blown auction to ensure that shareholder value is
maximized," third-largest shareholder Sandell Asset Management
Corp said in a statement late Monday.
Sandell owns about 7 percent of TPC as of Oct. 2, according
to Thomson Reuters data.
TPC said it will consider the non-binding proposal from
Innospec. It previously said a transaction with First Reserve
and SK Capital Partners would be in the best interest of
Perella Weinberg Partners LP is advising TPC.
Blackstone is providing equity financing for
TPC shares closed at $45.88 while Innospec shares closed at
$33.37 on Monday on the Nasdaq.