Dow Chemical may receive buyout bid

A consortium of Middle Eastern investors and American buyout firms reportedly is preparing a $50-billion bid for Dow Chemical Co. in what could be the world’s biggest leveraged buyout ever.

Quoting sources close to the deal, the Sunday Express, a British tabloid paper, said Sunday a financing package had been put in place for a breakup bid of between $52 and $58 a share.

Dow’s shares closed down 35 cents at $44.47 on Thursday.

At least half of the capital is being provided by investors from Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman, with the rest contributed by several U.S. buyout firms, including Kohlberg Kravis Roberts & Co., it said.

Representatives of Dow Chemical and KKR were not available for comment.

The story follows reports in recent months that strategic changes were afoot at Dow, which has been moving toward a focus on specialty chemicals.

In March, the Wall Street Journal said Dow was in talks with India’s Reliance Industries Ltd. about a potential joint venture, citing people familiar with the matter.

Analysts had said they were unsurprised by the report and expected Dow to split off its basic chemicals and plastics businesses as part of what it had called an “asset light” strategy, which would give it a more nimble and higher-margin profile focusing on specialty chemicals.

In late February, the Sunday Express reported that Dow could get a takeover offer of as much as $54 billion from buyout funds, without naming sources.

The paper said the approach was likely to come from a combination of global investors and American private equity giants, who intended to break up the group into smaller companies through a debt-laden buyout.