Braskem’s 2033 bonds also jumped, climbing 3 cents to 98.4 cents on the dollar on the news, according to Trace data. Image Credit: Bloomberg

Abu Dhabi: Braskem, one of the world’s top petrochemicals makers, received an offer of as much as 37.5 billion reais ($7.6 billion) from Abu Dhabi National Oil Co. and Apollo Global Management, according to people familiar with the matter.

Discussions are still in early stages, according to the people, who requested anonymity to discuss the confidential matter. One of them said the offer was non-binding.

The company surged the most on record in Brazilian trading after a columnist for Brazilian newspaper Folha de S.Paulo first reported on the proposal. The offer of 47 reais a share was more than double Braskem’s market value before the report sent the shares up.

Read more

Acquiring Braskem could be difficult because its two biggest shareholders, Novonor and Petroleo Brasileiro, haven’t always seen eye to eye, pulling a planned share sale last year because they couldn’t agree on price.

Novonor has not received any proposal from potential interested parties “that implies a material or binding evolution in discussions,” according to a filing of Braskem on Friday. Apollo declined to comment. ADNOC and Petrobras didn’t immediately respond to a request for comment.

Braskem shares were briefly halted in Sao Paulo after jumping as much as 42 per cent, bringing its total market capitalization to 20 billion reais. The share closed the session up 24 per cent to 23.76 reais. Braskem’s 2033 bonds also jumped, climbing 3 cents to 98.4 cents on the dollar on the news, according to Trace data.

Positive for shareholders

A deal would be “a major positive for shareholders,” said Malcolm Dorson, a portfolio manager at Mirae Asset Global Investments in New York. “The idea of Apollo, from the angle of a value-creating financial manager, and ADNOC, as a best-in-class operator, teaming up could create value for shareholders.”

In an interview in March, Petrobras CEO Jean Paul Prates said the company was considering raising its own stake in Braskem, potentially reversing a long-time strategy to offload its holding. Novonor is formerly known as Odebrecht, the construction conglomerate whose corruption scandal brought down several prominent political figures in Latin America.

Brazilian newspapers including O Globo and Valor Economico have reported over the past year that Apollo was in talks to acquire Braskem.