Reichhold Explores Sale; Dainippon Reviews Offer

Reichhold Chemicals Inc., the target of a $473-million takeover offer by Dainippon Ink & Chemicals Inc. of Japan, said Monday that it is holding preliminary talks with other groups interested in buying the company.

In addition, Dainippon said in a government filing that it would reconsider its $52.50-a-share acquisition offer if its executives could meet Reichhold’s managers.

Reichhold, a manufacturer of speciality chemicals and inks based in White Plains, N.Y., last Wednesday rejected the Japanese company’s bid as inadequate and said it had ordered its investment advisers to seek out any better offers.

Wall Street has expected Reichhold to be sold for more than $52.50 a share since Dainippon, one of the world’s largest makers of printing ink, announced its offer June 25. Investors that day drove up the price more than $17 to $59.50 a share and have since added nearly $5 more.

Reichhold shares closed unchanged at $64.125 in New York Stock Exchange trading.

Reichhold disclosed the preliminary talks in a filing with the Securities and Exchange Commission. It did not identify any of the groups involved in the talks.

In an earlier separate filing with the SEC, Dainippon said it was prepared to review its offer for Reichhold subject to talks with Reichhold management and the ability to review extra information about the company.

In a letter dated June 29, Dainippon President Shigekuni Kawamura said: “If we are afforded an opportunity to meet with Reichhold management and to review additional information about the company, we are prepared to reconsider all aspects of our offer.”

The letter had not reached Reichhold’s board before it rejected the Dainippon offer, Dainippon said.

Executives at Reichhold have been quoted as saying the company wanted at least $70 a share from Dainippon.

Dainippon, by Japanese standards an unusually aggressive acquirer of foreign businesses, last year paid $550 million for the graphics-arts materials group of Sun Chemical Co.