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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (618)	1/27/2005 1:23:34 PM
From: richardred	Read Replies (1) \| Respond to of 7242

UPDATE 2-Danisco to take over Genencor, buys Eastman's stake Thu Jan 27, 2005 11:53 AM ET (Adds background, analyst comment) COPENHAGEN, Jan 27 (Reuters) - Danish sugar and ingredients group Dansico (DCO.CO: Quote, Profile, Research) unveiled a $591.5 million plan to buy out the other investors in U.S. biotech firm Genencor (GCOR.O: Quote, Profile, Research) , including Eastman Chemical's (EMN.N: Quote, Profile, Research) 42 percent stake. Dansico said in a statement on Thursday it paid $419 million for Eastman Chemical's stake and offered to buy out remaining Genencor shareholders for $19.25 per share, or about $172.5 million. The deal, which values all of Genencor at about $1.1 billion, bolsters the Danish firm's push into food and industrial enzymes. Danisco and Eastman currently each own approximately 42 percent of Genencor, which would become a wholly owned Danisco subsidiary under the plan. Genencor shares shot up 22.9 percent to $19.10 in Nasdaq trade by 1634 GMT. Danisco shares were off 4.23 percent at 328.5 crowns, underperforing the blue chip KFX-index in Copenhagen. Eastman shares were 1.45 percent higher at $54.02 on the New York Stock Exchange. "It is a negative surprise. The market had expected Danisco to sell its stake and instead it takes over all of Genencor," said Jyske Bank analyst Torsten Bech. Danisco said the buy would improve its capabilities in enzymes for food and animal feed and broaden its access to industrial enzymes. "An acquisition will position Danisco as a major player in a new profitable business area, industrial enzymes," it said. Enzymes are used to aid the manufacture of a wide range of products from food to detergents to textiles. Analysts said the purchase price valued Genencor at more than 40 times expected 2004 earnings but said Genencor's loss-making health care leg made valuation difficult. "Product-wise it's a nice fit with Danisco closing the gap they had in flavours and enzymes with the acquisition," Sydbank analyst Brian Kirk said. Danisco said it would finance the buy through existing bank relations but analyst said the acquisition could mean Danisco had decided not to bid for Danish rival Chr. Hansen's (CHRHb.CO: Quote, Profile, Research) food ingredient business, which was put up for sale in November. Danisco said Genencor's board of directors had approved the acquisition agreement. Deutsche bank said it had advised Danisco on the deal. yahoo.reuters.com