Innospec Inc. (IOSP:US) and Blackstone Group LP (BX:US) raised their offer for TPC Group Inc. to $744.7 million, a week after the U.S. petrochemicals producer ended talks with them and agreed to be bought by two private-equity firms.
Innospec offered $47.50 a share, up from a range of $44 to $46, Houston-based TPC said today in a statement. Blackstone will provide equity financing for the bid, Innospec said in a separate statement. The purchase would include assumption of $212.8 million of net debt, according to data (IOSP:US) compiled by Bloomberg.
TPC will restart talks with Innospec and will allow Blackstone and the Littleton, Colorado-based fuel-additives producer to resume due diligence. On Nov. 8, TPC said it ended discussions with Innospec and agreed to a revised $45-a-share offer from funds backed by First Reserve Corp. and SK Capital Partners, which had previously bid $40.
“Our diligence so far has confirmed our initial findings that TPC is a good strategic fit with Innospec,” Patrick Williams, Innospec’s chief executive officer, said in the statement.
TPC is the world’s biggest maker of butadiene, a chemical used to make synthetic rubber, and competes with LyondellBasell Industries NV, Royal Dutch Shell Plc and Exxon Mobil Corp. It plans to expand output by refurbishing a Houston plant to make the chemical from butane, a component of natural gas that has increased in supply with production from shale-rock formations.
TPC rose (TPCG:US) 3.9 percent to $47.78 at the close in New York, the highest since the shares began trading in 2004. Innospec climbed 0.8 percent to $29.80.
TPC shareholders are scheduled to vote Dec. 5 on the offer from First Reserve and SK, which has regulatory approval. Innospec expects to submit a definitive proposal before then, TPC said. Innospec said its shareholders wouldn’t need to approve the transaction, TPC said.
Sandell Asset Management Corp., the third-largest TPC investor according to data compiled by Bloomberg, said on Nov. 9 that the company shouldn’t have broken off talks with Innospec and should hold an auction to realize the highest price.
Sandell called the initial $40 bid from First Reserve and SK an “outrage” and an attempt to steal the company at the bottom of the industry’s cycle. If TPC (TPCG:US) hadn’t received a bid, the shares would have risen to $55 to $57 in the next year, Chief Executive Officer Thomas E. Sandell wrote in an Aug. 28 letter to TPC’s board.
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