Bondalti is “surprised” by Ercros management’s rejection of the takeover bid
Bondalti stresses that the decision is not unanimous and is based on "serious omissions, misrepresentations and inaccuracies in the report issued by the company's board of directors".
Bondalti is “surprised” by the statement issued by Ercros’ board of directors, in which it expressed its “unfavourable” position on the takeover bid by the Portuguese company, which values the Spanish chemical company at €320 million.
“Bondalti considers that Ercros is making a serious value judgement by insinuating that Ercros would be diluted and lose its relevance in a much larger conglomerate whose main business is not chemicals, when this is not the case”, the Portuguese company argues in a statement released on Friday in response to the Spanish firm’s announcement.
“The chemical industry has been the founding business of the José de Mello Group since its creation in 1898. Today, Bondalti is one of the European leaders in aniline sales and the largest Iberian producer of chlorine”, it adds.
The board of directors of the Spanish chemical company considered that the €3.505 offered by Bondalti “does not fully reflect Ercros’ future value creation potential”. However, this assessment is not unanimous among the board members. While the three directors with more than 6% of the capital say they will reject the takeover bid, one director approves the takeover bid and another warns of the effects on the share price if the operation fails.
Bondalti itself highlights this lack of consensus in its response: “The statement ignores the lack of unanimity among the directors, failing to reflect the favourable opinion of director Lourdes Vega Fernández towards the takeover bid, nor the wishes of director Eduardo Sánchez Morrondo.”
Independent director Lourdes Vega Fernández takes a favourable view of the Portuguese company’s offer, which she defends on the basis of the current market situation, the terms of the offer and Evercore’s recommendation. Director Eduardo Sánchez Morrondo also wished to express a different individual opinion, arguing that, with regard to the share price, “the market reacted very negatively to any sign that the takeover bid might not go ahead, approaching the share price of two years ago, which was €2.50”.
In a statement sent to the market on Thursday, the management commented on the offer for the first time after Spain’s National Securities Market Commission (CNMV) authorised the transaction on 10 February, after a lengthy process that has lasted almost two years, since the company owned by the José de Mello Group launched a takeover bid in March 2024 for the entire share capital of Ercros, offering €3.505 [adjusted for dividend payments], a value that values the company at €320 million.
Bondalti expressed “its surprise at finding that Ercros, through its communication to the media, made serious omissions, misrepresentations and inaccuracies regarding the report issued by the company’s board of directors”. Among these is the fact that the Spanish giant’s management hired Evercore to evaluate the consideration offered by the Portuguese company, which issued an assessment in which it considers the takeover bid price to be “reasonable”. Bondalti points out, in turn, that Evercore said the price was “fair”.
Ercros’ board of directors also warned that the takeover bid would “alter the group’s financial structure” and that Ercros would “increase its level of indebtedness in the coming years”. Bondalti considers this warning to be unfounded, given that “a significant number of the banks financing the takeover bid are also current financiers of Ercros and are therefore fully aware of its balance sheet”.
“In the prospectus submitted to the CNMV, Bondalti acknowledges its intention to change Ercros’ current dividend policy and reduce the distribution of dividends to shareholders due to strategic and financial considerations”, the Ercros board of directors also pointed out.
Bondalti counters that “Ercros currently does not distribute dividends and that its current dividend policy requires financial conditions that the company is far from meeting at this time”.
The success of the takeover bid is subject to the acceptance of at least 50% of the capital, but as far as the employees are concerned, it has the green light. As part of its legal obligations to inform employees, on 12 February the board received a favourable opinion from the majority trade union sections of CCOO and UGT at Ercros, a point that Bondalti emphasises in its response.
“The trade unions, the main representatives of Ercros’ employees, support the takeover bid because they believe it can help to strengthen stability, industrial viability and the future of employees in a complex context, both for Ercros and for the European chemical industry”, recalls the José de Mello Group company.
In this document, the workers’ representatives consider that the operation may have a positive impact on the future viability of the company, value the commitments to maintain employment and working conditions, highlight the preservation of industrial activity and territorial commitment, and understand that integration into a larger industrial group may strengthen the stability of the company in a structurally cyclical sector.
