February 15, 2011

Hedge fund against DuPont's bid for Danisco

Elliott Associates, the hedge fund owning about 1.2% of Danisco, has expressed dissatisfaction regarding DuPont's US$5.8 billion bid for Danisco.

Elliott Associates wrote to Danisco's board saying the 665-crowns-a-share offer was a "shameful betrayal" of shareholders and was "very unlikely" to succeed.

The offer ignores Danisco's strong market position, the room to boost margins, and the synergies DuPont will enjoy, and does not offer a premium for control of the company, according to Elliott.

Danish newspapers quoted Ellen Kullman, DuPont's chief executive as saying she would not raise the offer and she reiterated it was "very fair and fully valued."

Both the companies said the bid was the best of several offers and provided the best possible value for shareholders.

Last month, the US chemical giant announced an agreement to acquire Danisco for US$5.8 billion in cash and assumption of US$500 million of debt. DuPont said the combination would create a world leader in industrial biotechnology.

The transaction announced last month is subject to customary closing conditions, including certain regulatory approvals and the tender of more than 90% of the Danisco shares in the tender offer.