Nuplex kicks off $57m bid for APS

Resin manufacturer Nuplex Industries is making a A$47 million ($57 million) takeover bid for Asia Pacific Specialty Chemicals.

Nuplex has offered 70Ac a share for all of the Australian-listed chemical group - 7.7 per cent higher than a competing offer by Symex Holdings.

The bid is part of Nuplex's plan to expand the company and maintain its position as Australasia's largest manufacturer of resins for coatings, adhesives, composites and paper, says the company.

The offer is subject to several conditions, including Nuplex achieving at least 90 per cent of all APS shares on issue and gaining Australian Foreign Investment Review Board approval.

Shares in Nuplex slipped a cent to $3.08 immediately after the announcement as investors weighed up the risks, but closed up a cent at $3.10.

Last year Nuplex joined the lengthening list of New Zealand companies whose major acquisitions in Australia have turned out to be not all they seemed.

It made a belated $11.9 million writedown in the value of Medihold International and restated its June-year profit from $13.2 million to $1.3 million.



In the year to December 31, APS recorded an after-tax loss of A$4.6 million as a result of restructuring costs and tough competition. Revenue for the period was A$182 million.

Nuplex managing director John Hirst said yesterday that much of the restructuring needed to return APS to profitability had been done.

A merger between the two companies would deliver significant benefits for Nuplex shareholders and customers of the merged business, he said.

"It will make a sound strategic fit with Nuplex and our merged operations will ultimately deliver higher earnings per share for Nuplex shareholders."

Nuplex, which is being advised by Westpac Institutional Bank, intends to lodge the full terms of its offer and bidder's statement with the Australian Securities and Investment Commission this week.

The purchase will be financed from the proceeds of an underwritten issue of capital notes to Nuplex's New Zealand investors and from undrawn credit lines and cash resources.

The company said yesterday that the capital notes issue would raise between $60 million and $75 million, offering a 9.3 per cent return a year, payable quarterly.

The issue, underwritten by lead manager JBWere, will open on 9 May.

- NZPA