Pennwalt Agrees to Buyout by Elf Aquitaine

From Associated Press

Pennwalt Corp. dealt a severe blow to an investor group’s hostile takeover bid Monday by agreeing to a $1-billion “white knight” buyout by the French government-controlled Societe Nationale Elf Aquitaine.

Some analysts said they did not expect any rival bids to top the French oil and chemical company’s $132-a-share offer for each of Pennwalt’s approximately 8 million common shares outstanding.

Centaur, a New York investment group that was offering $110 a share for Pennwalt, issued a statement extending its offer through 5 p.m. EST Friday. The offer, which had been set to expire at 5 p.m. Monday, was extended to give the group time to review the agreement with Elf Aquitaine, the statement read.

The group controls about 12.7% of Pennwalt’s common shares.

Pennwalt jumped $13.1250 to $130.1250 a share on the New York Stock Exchange.

Elf Aquitaine said it would begin a tender offer for the Pennwalt shares on or before Friday with a scheduled expiration 20 business days later.


The merger, which would maintain Pennwalt’s name and keep its headquarters in Philadelphia, is subject to shareholder approval. The boards of both companies have approved the agreement.

“We are delighted that Pennwalt is becoming a member of a global organization in which there is such a strong strategic fit between our businesses,” Pennwalt Chairman and Chief Executive Edwin E. Tuttle said in a statement.

Unlike Centaur’s offers, which Pennwalt repeatedly spurned, Tuttle called the Elf Aquitaine buyout “in the best interests of all Pennwalt stakeholders.”

Michel Schneider Maunoury, chairman and chief executive of Elf Aquitaine Inc., the corporation’s U.S. holding company based in Stamford, Conn., said in a telephone interview the deal had been under discussion for three to four weeks and he did not expect any trouble completing it.

Maunoury said the merger would enhance Elf Aquitaine’s efforts to develop its specialty chemical business and to increase its presence outside Europe.

Elf Aquitaine, in which the French government owns a controlling interest, has more than $20 billion in annual sales, with more than a third related to chemicals.