U.S. Chip Firm Versum Accepts Higher $5.8 Billion Takeover Bid by Germany’s Merck
Merck KGaA Wins Versum With $5.8 Billion Bid That Trumps Rival
(Bloomberg) -- Versum Materials Inc. moved to accept Merck KGaA’s offer to buy the U.S. semiconductor-components maker after the German company raised its bid, trumping a planned merger with Entegris Inc.
Merck proposed $53 a share, Versum said in a statement Monday, up about 10 percent from the original bid it made on Feb. 27. Versum said the offer, valuing the target’s equity at $5.8 billion, is superior to the $3.8 billion deal with Entegris, which said it doesn’t plan to revise its bid.
“Apparently $53 is the magic number,” said Evercore ISI analyst Luke Sergott. The market had earlier appeared to price in that amount on the deal, he said in a note to clients.
Versum shares were little changed at $51.20 at 9:30 a.m. in New York, while Merck, which is unrelated to U.S.-based Merck & Co., was up 0.3 percent in Frankfurt.
Merck Chief Executive Officer Stefan Oschmann has used the lure of cash to overcome resistance from Tempe, Arizona-based Versum. The transaction would help the Darmstadt, Germany-based conglomerate shore up its performance-materials division, the smallest of its three main units.
Versum twice rebuffed Merck’s advances since the initial approach, and the German company initiated a hostile tender offer. Oschmann met in Munich over the weekend with Versum Chairman Seifolla Ghasemi, and a proposal was sent to Versum’s board yesterday, according to a spokesman for Merck. Should Merck prevail in breaking up the Entegris deal, Versum will have to pay a $140 million termination fee.
Even after the latest twist on Monday, Versum had kept the door open to a higher bid from Entegris, saying that the company can make a counteroffer by April 11, and that it would consider any changes in the merger agreement in good faith. Entegris appeared to drop out of the running quickly.
“Entegris has considered its options and does not currently intend to propose to revise the terms” of the planned merger, the Billerica, Massachusetts-based company said in a statement.
Oschmann is in aggressive deal mode, recently completing an agreement worth as much as $4.2 billion to collaborate on an experimental cancer drug with GlaxoSmithKline Plc. He has said there are other attractive targets in semiconductors.
--With assistance from Marthe Fourcade.
To contact the reporter on this story: Tim Loh in Munich at tloh16@bloomberg.net
To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John Lauerman, Thomas Mulier
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