In a letter dated Apr. 1 sent to Grace management, 40 North principals David Winter and David Millstone said the higher bid reflected “our belief that Grace’s full potential for all stakeholders can best be achieved outside of the public markets with proactive, hands-on management. It offers shareholders the opportunity to realize immediate, certain and attractive value.”

Nevertheless, while the investment group has upped its offer, its April letter also reflected some irritation with Grace management. 40 North said its due diligence was hindered by the limited information provided by Grace, and it did not fully support management’s “optimistic growth expectations” for the specialty catalysts business. In addition, it voiced serious reservations about Grace’s “questionably timed” acquisition of Albemarle’s Fine Chemistry Services business that was announced in February.

Grace said that in order to complete its review, it still requires additional customary information, including details of debit and equity financing commitments, as well as comments on the transaction documents previously forwarded.

40 North made a first offer of $60/share last November, which Grace rejected, then increased it to $65/share in January when Grace responded that it was open to a sale providing that a transaction reflected its “full value”.

Author: Elaine Burridge, Freelance Journalist