Covestro Rejects $12 Billion Takeover Proposal From #AbuDhabi's Adnoc - Bloomberg

Covestro Rejects $12 Billion Takeover Proposal From Abu Dhabi's Adnoc - Bloomberg

Sultan Ahmed Al Jaber

Photographer: Aaron M. Sprecher/Bloomberg

Covestro AG has rejected an initial takeover proposal from Abu Dhabi National Oil Co. as too low, people familiar with the matter said.

The German plastics firm told Adnoc Chief Executive Officer Sultan Al Jaber in a letter Thursday that the proposed valuation doesn’t provide ground for further talks, according to the people, who asked not to be identified discussing confidential information. It also raised the question of whether Adnoc would be the best owner for some of Covestro’s assets, they said.

Covestro could be open to discussing a deal if it were offered better terms, the people said. In a recent meeting with Covestro leadership, Al Jaber had proposed a potential bid in the mid-€50s per share, which would value the company at nearly €11 billion ($12 billion), people with knowledge of the matter have said.

A bid of roughly €55 per share would be almost 40% above Covestro’s recent trading price, in line with the premiums typically offered for listed German companies. Still, refusing a first offer isn’t unusual. Some research analysts have given the company a target price as high as €64, data compiled by Bloomberg show.