April 12, 2012 / 7:20 AM / 6 years ago

UPDATE 2-Cytec offers to buy UK's Umeco for $439 mln

* Offer of 550 pence per Umeco share, a 46 pct premium

* Deal approved by both cos’ boards

* Acquisition to add to Cytec’s earnings immediately

* Hexcel may counter bid for Umeco - analysts

* Umeco shares surge 48 percent

By Brenton Cordeiro

April 12 (Reuters) - Specialty chemicals maker Cytec Industries Inc said it made an offer valued at about $439 million for British aerospace parts supplier Umeco Plc , in an attempt to build on its advanced composites businesses.

The offer of 550 pence ($8.75) per Umeco share represents a premium of about 46 percent to Umeco stock’s closing price on Wednesday. Umeco shares rose as much as 48 percent on Thursday.

The boards of both companies have unanimously approved the transaction. Cytec said it had received commitments from Umeco’s top three shareholders - BlackRock, Hermes and Aberforth - to vote in favor of the deal.

However, U.S.-based Hexcel Corp, which makes carbon fiber and other composites, may also make an offer for Umeco, analysts said.

“If there were to be a counter bid, Hexcel would be the likeliest candidate, but in our view this is likely to prove a knockout bid,” N+1 Brewin analysts James Tetley and Jon Lienard said in a client note.

Umeco, which counts Boeing, Airbus and BAE Systems among its customers, declined to comment beyond its statement on Thursday. Cytec and Hexcel were not immediately available for comments outside regular U.S. business hours.

Cytec said the acquisition, expected to close in the third quarter, would immediately add to its earnings. It would be financed using cash on hand, the company said in a statement.

“(The acquisition) greatly improves our composite presence in the industrial sector,” Cytec’s Chief Executive Shane Fleming said. “The acquisition also enhances our near-term composite capacity while we complete capital investments.”

Umeco also make composite materials for Formula One racing cars. The company’s shares were trading at 548 pence on the London Stock Exchange at 0915 GMT.

Barclays advises Cytec on this deal, while Umeco is advised by Rothschild and Investec.

Cytec did not expect “significant” workforce reductions resulting from the transaction, but hinted at closing Umeco’s head office in the UK.

Cytec also forecast first-quarter adjusted earnings per share to be between 45 percent and 50 percent above the current market expectations of 85 cents per share.

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