After spending several months considering a buyout offer from one of its original parent companies, Melamine Chemicals Inc. has reached an agreement to sell to another company.
Borden Chemical Inc. of Columbus, Ohio, on Oct. 9 announced a $20.50 per-share deal to buy Melamine Chemicals of Donaldsonville, La. The cash value of the deal would be close to $90 million.
The deal is subject to approval of regulatory agencies and 51 percent of Melamine shareholders.
Ashland Inc. of Russell, Ky., which owns a 23.1 percent stake in Melamine Chemical, had made two bids for the company over the summer. Ashland initially offered $12.50 per share in July, but upped that bid to $14.75 per share in August. Nasdaq prices for the outstanding shares quickly climbed higher than each of Ashland's bids after they were announced.
Ashland indicated approval for Borden's latest offer, which would net Ashland about $20 million.
``While we currently have only limited information regarding the offer, at this price level Ashland Inc. would be willing to withdraw its $14.75 per-share offer and tender its shares,'' Paul W. Chellgren, Ashland chairman and chief executive officer, said in an Oct. 10 news release.
A news release issued by Borden and Melamine indicated Melamine's other 23.1 percent shareholder, ChemFirst Inc. of Jackson, Miss., agreed to tender its shares to Borden.
The stock market again reacted enthusiastically to the latest bid. Melamine's stock traded at nearly $21 per share early Oct. 10.
Melamine Chemical is the largest U.S. producer of melamine crystal for the merchant market. Its products are used for a variety of purposes, including melamine-formaldehyde molding compounds, and as flame retardants in polyurethane foam. The company reported a record $60 million in sales for its fiscal year ended June 30.