Elementis to pay less for Mondo after investor backlash
* To pay $500 mln, down from $600 mln
* Elementis investors concerned over original price - source
* Company cuts rights issue to $230 mln from $280 mln
(Adds share fall, reason for price revision)
By Noor Zainab Hussain
Sept 11 (Reuters) - British speciality chemicals company
Elementis has struck a deal to buy Mondo Minerals for
$100 million less than initially agreed following criticism of
the original price from its shareholders.
Elementis said on Tuesday it had agreed with seller U.S.
private equity firm Advent to pay $500 million for Mondo
Minerals, down from $600 million previously.
Elementis said in June it was buying Amsterdam-based Mondo
to expand into talc additives used in a range of products from
plastics to cosmetics.
Chief Executive Office Paul Waterman said Elementis had
agreed the revised deal after consulting with its shareholders.
"The feedback that they had from shareholders was that the
business makes a lot of sense, strategically seems good, but
they had some concerns raised about the price that Elementis was
paying," a source familiar with the matter told Reuters.
"A number of concerns were raised, but it was largely over
the price," the source added.
Mondo, which owns talc mines in central Finland, makes
industrial talc additives used to strengthen plastics, provide
corrosion resistance to coatings, an oxygen barrier to food
packaging and UV protection to cosmetics.
Elementis, for its part, owns a mine in California that
produces hectorite, a soft clay used in personal care and beauty
products such as face creams, using a mine-to-market model
similar to Mondo's.
Elementis said the revised deal had received strong support
from its top shareholders including Threadneedle Asset
Management and APG Asset Management and written confirmation of
support from two more of its top five investors.
It expects the deal to add to adjusted earnings per share in
the first full year of ownership.
Elementis also said the acquisition would be funded by a
rights issue of about $230 million and from debt facilities. It
had previously flagged a rights issue of $280 million.
Shares in Elementis, which have fallen 12.3 percent this
year, were down 3.9 percent at 243 pence at 0814 GMT.
The deal to buy Mondo comes after a $360 million acquisition
last year by Elementis of U.S.-based SummitReheis to expand its
personal care chemicals business.
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by
Gopakumar Warrier and Mark Potter)
First Published: 2018-09-11 08:19:08
Updated 2018-09-11 11:15:51
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