Mexichem SAB de CV raised its bid for leading European pipe maker Wavin NV, but Wavin officials said the new offer is still too low.
Wavin's largest shareholder, however, has urged the two sides to continue to talk.
On Dec. 6, Zwolle-based Wavin disclosed that Mexichem had raised its bid to 9 euros per share, up from 8.5 euros. The new deal values Wavin at about 455 million euros ($610 million).
The higher bid followed a meeting between representatives of both companies and their financial advisers, where Mexichem provided “additional information on the terms and conditions of the offer, such as strategic rationale, and plans regarding employees, organizational structure, governance and proposed offer price,” Wavin said in a news release.
Following the meeting, Mexichem increased the offer price.
But Wavin noted that while the two companies made progress on non-financial terms, it still considers 9 euros per share too low — the offer “materially undervalues the company and its prospects,” Wavin said.
On Dec. 7, Dutch insurer Delta Lloyd Groep NV said Wavin should allow Mexichem to proceed with due diligence on the deal.
The Amsterdam-based company, which owns about 7.9 percent of Wavin, said the per-share offer of 9 euros still undervalues the company — head of equities Jack Jonk told Dow Jones that the stand-alone value of Wavin is more than 10 euros per share, and Mexichem's bid should reflect synergies that could be realized by the combination of the two companies.
Tlalnepantla, Mexico-based Mexichem, a top Latin American PVC pipe and specialty chemicals maker, made its first unsolicted offer for Wavin in November.
Mexichem has said that if the deal is finalized, the Mexican company will become the world's largest producer of pipes and solutions and the only one that is totally integrated.
Wavin has manufacturing facilities in 18 European countries and one in China. It employs 6,400 and reported 2010 sales of about $1.6 billion.