BRUSSELS—Belgian urethane foam maker Recticel N.V./S.A. has rejected an unsolicited, non-binding $791 million offer from Kingspan Group P.L.C. to acquire the company's insulation and flexible foams divisions.
The company's board unanimously decided to turn down the offer saying in an April 26 statement that engaging with Kingspan in this respect was "not in the interest of its stakeholders."
"A sale of the insulation and flexible foam divisions is not in line with Recticel's strategy. As a result of the ... offer, Recticel would remain a listed entity with a significantly reduced business focusing on bedding and automotive only with a significantly lower consolidated revenue and (earnings)," the company statement added.
The board concluded that the proposition was unattractive for its shareholders and employees given the "lack of scale, the reduced strategic fit, financial flexibility, equity story and synergy potential between the two remaining divisions."
Citing its legal advisers, the Brussels-based company said the offer would also trigger regulatory risks, for which Kingspan had not proposed adequate solutions.
It added that the offer would give rise to "significant negative tax consequences," both for Recticel and, in case of a capital distribution, its shareholders.
Kingspan, based in Kingscourt, Ireland, had separately agreed with Austria-based Greiner to sell the flexible foam business to the company upon the acquisition from Recticel.
However, Recticel has maintained that the back-to-back agreement with Greiner raises a number of concerns that have not been addressed in a satisfactory way by Kingspan nor by Greiner.
And Recticel said the offer "significantly" underestimated the standalone value of the two divisions.
According to data from Urethanes Technology International, Recticel has four sites in Europe: Wevelgem, Belgium; Bourges, France; Sostanji, Slovenia; and Stoke-on-Trent, England. Kingspan also has plants in all of those countries with the exception of Slovenia. It has a total of 19 foaming plants across Europe.