BASF Gets Backing Of Engelhard Board For Takeover

BASF (BF) said Tuesday it reached a definitive agreement to buy Engelhard Corp. (EC) for $39 a share in cash. Engelhard's board will recommend its shareholders tender their shares to BASF, and will withdraw its $45 per share self-tender offer for about 20% of the company's shares.

"We are very pleased that BASF and Engelhard were able to reach agreement on a negotiated transaction. This is a crucial step towards our goal of acquiring Engelhard," said Dr. Jurgen Hambrecht, Chairman of the Board of Executive Directors of BASF, in a press release. "We are confident that Engelhard's shareholders will tender their shares into our offer, following the recommendation of Engelhard."

BASF's $39-per-share all-cash offer is scheduled to expire at midnight on Monday, June 5, 2006. The offer values New Jersey-based Engelhard at about $5 billion.

"Our board has determined that the $39 per share offer provides fair value to our shareholders, and the agreement paves the way for an orderly and cooperative transaction," said Barry W. Perry, Engelhard's chairman and chief executive officer, in a press release. "Our ability to deliver this value would not have been possible without the extraordinary efforts of our employees, who stayed focused and demonstrated their dedication and ingenuity by delivering outstanding results."

Last week, ISS, an influential U.S. proxy advisory firm, recommended Engelhard shareholders elect BASF representatives to Engelhard's board, which was essentially a nod in favor of BASF's bid.