DuPont Co. plans to own all the shares of its DuPont Canada Inc. subsidiary.
Wilmington, Del.-based DuPont will offer shareholders C$21 (US$14.24) per common share in cash, a 22 percent premium over DuPont Canada's March 18 closing price of C$17.24 (US$11.69) on the Toronto Stock Exchange. The offer will be mailed to shareholders by April 17. The firm's shares have traded at C$15.50-C$28.55 (US$10.51-$19.36) in the past year.
DuPont Canada in Mississauga, Ontario, operates several plastics businesses. Its Enhance Packaging Technologies Inc. and Liqui-Box Corp. subsidiaries offer a range of liquid packaging systems and related films, bottles and filling equipment. It makes nylon engineering resins, specialty compounds, coatings used by plastic auto parts molders and nonwoven membranes used in housing construction. It also makes and resells nylon fibers, specialty chemicals and polymers made by its parent firm and affiliates.
The board of DuPont Canada is recommending that shareholders approve the deal. DuPont already owns 76 percent of the Canadian subsidiary and would pay a total of C$1.4 billion (US$949.2 million) to get the rest.
A DuPont Canada spokesman would not comment on reports that some investment firms holding large blocks of the minority shares think the offer is too low. The Globe and Mail reported that Jarislowsky Fraser Ltd. of Montreal and AIC Ltd. are among investors that could hold out for a higher offer.
The takeover is conditional on DuPont Co. receiving 90 percent of the minority shares. If the deal is unsuccessful, DuPont Co. will transfer all its ownership in DuPont Canada to its DuPont Textiles & Interiors business, which it plans to spin off. DuPont Canada spokesman Richard Gareau said a big chunk of textiles/interior business resides in DuPont Canada, so the business would be easier to spin off if the parent owned all the assets.
DuPont Canada's sales grew 13 percent last year to C$2.5 billion (US$1.7 billion). Profit was C$247.5 million (US$167.8 million).