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Dow Chemical says no talks going on for $50b leveraged takeover

Chemical, responding to a British newspaper report that a consortium was preparing a $50 billion bid for the company, said on it has had no discussion about a leveraged buyout.

  • Reuters
  • Published: 00:00 April 11, 2007
  • Gulf News

New York: Chemical, responding to a British newspaper report that a consortium was preparing a $50 billion bid for the company, said on it has had no discussion about a leveraged buyout.

The statement sent Dow shares down 1.1 per cent to $46.10 in after-hours trading, after they had risen 4.9 per cent to $46.63 during trading on the New York Stock Exchange.

Analysts, meanwhile, expressed scepticism about a possible buyout, saying a strategic joint venture was more feasible.

"The company has had no discussion about a leveraged buyout," Dow said in a brief statement after the NYSE closed for the day.

It said its statement was reiterating comments made earlier on Monday by Andrew Liveris, its chairman and CEO.

Earlier that day, Dow had said it would not comment on market rumours and speculation.

But a Dow spokesman, Chris Huntley, did say: "We harness tremendous power from integration, we are not going to move away from that strategy ... so a friendly takeover is not going to happen."

He said most analysts agree that a hostile takeover is unlikely as Dow is too large and too integrated to allow such a bid to be successful. The Sunday Express, a British tabloid, had reported that an approach valuing Dow at $50 billion or more could come by the end of the week.

The report, which quoted sources close to the deal, said at least half of the capital was being provided by investors from Saudi Arabia, Kuwait, Bahrain, Qatar, the UAE and Oman, with the rest contributed by a number of US buyout firms.

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