Germany’s Merck makes $5.9 billion counterbid for Versum
Versum shares soared 15 percent to $48.32 in pre-market trading on Wednesday, while Merck’s shares lost 3 percent.
Entegris announced a $4 billion all-stock deal in January, saying it wanted to create a big chemical supplier to the semiconductor market at a time when the industry is under pressure.
Merck, which in 2014 bought Britain’s AZ Electronic Materials for 1.9 billion euros, said it was ready to proceed immediately to due diligence and to quickly agree a deal, adding it did not need its own shareholders to approve a transaction.
“The transaction that Versum recently disclosed significantly undervalues Versum,” Merck Chief Executive Stefan Oschmann said in a letter to Versum’s board of directors.
“Instead of the speculative value offered by the Entegris transaction, the all-cash proposal would deliver immediate and certain cash value to Versum stockholders and employees”, he added.
The proposed deal would value Versum at 13.3 times its 2018 earnings before interest, tax, depreciation and amortization, Oschmann said, adding he anticipated no regulatory problems.
Merck is working with Guggenheim and Sullivan Cromwell on the deal, which a spokesman said was fully financed and has not yet been discussed with Versum.
Versum was not immediately available for comment.
Reporting by Arno Schuetze; Editing by Riham Alkousaa and Mark Potter