Covestro AG (OTC:COVTY) reportedly rejected an initial takeover proposal from Abu Dhabi National Oil Co (ADNOC), citing a 'too low' offer.
Covestro told ADNOC CEO in a letter that the proposed valuation doesn't provide ground for further talks, as per Bloomberg.
This week, ADNOC made an initial offer of around $12 billion to Covestro, representing a per-share price in the mid-50 euros, which compares with the closing price of 40.31 euros as of 19th June.
As per the report, an offer of €55 per share would be around 40% above Covestro's recent trading price, which aligns with the premiums typically offered for listed German companies.
According to data compiled by Bloomberg, some research analysts gave Covestro a target price as high as €64.
ADNOC's offer is at par with Abu Dhabi's motive to diversify the economy from energy.
Last month, Covestro increased 2023 guidance for EBITDA to €1,100 million – €1,600 million (vs. prior view of significantly below the previous year of €1,617 million earlier) and free operating cash flow of €0 – €500 million (vs. significantly below €138 million in the last year).
Also, the company provided a Q2 EBITDA outlook of €330 million – €430 million.
Price Action: COVTY shares traded higher by 3.3% at $26.61 on the last check Thursday.