Canadian Plastics

Investors to make US$50 billion buyout bid for Dow: report

A group consisting of Middle Eastern investors and American buyout firms is preparing a US$50 billion bid for Mich....

April 9, 2007   Canadian Plastics

A group consisting of Middle Eastern investors and American buyout firms is preparing a US$50 billion bid for Mich.-based Dow Chemical Company, according to a UK tabloid.

The Sunday Express reported on Sunday that the group had secured financial backing to make a bid for the company. The alleged bid would be the biggest leveraged buyout target to date.

The newspaper reported that Middle Eastern investors were providing half of the financial backing, and the rest of the backing would come from US-based firms like Kohlberg Kravis Roberts & Co. No sources were cited for the information.

Dow was also recently rumoured to be forming a US$20 billion joint venture agreement with Indian petrochemical firm Reliance Industries Ltd. (RIL). Dow CEO Andrew Liveris has previously expressed an interest in creating a new, profitable model for the company’s polystyrene and polypropylene businesses.

News of this latest bid has given the company’s shares a boost. The company’s shares opened at US$47.09 on Monday on the New York Stock Exchange, and were being traded at US$46.56 at press time. The day’s range at noon was US$46.30 to $47.60, beating the previous 52-week high of US$47.26 per share. The Sunday Express reported that the offer could be between US$52 and $58 a share.


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