Reuters: Hot Stocks: UPDATE 1-BASF to buy fish oil maker Pronova in $845 mln deal

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UPDATE 1-BASF to buy fish oil maker Pronova in $845 mln deal Nov 21st 2012, 09:56 Wed Nov 21, 2012 4:56am EST * BASF to buy Pronova for 4.85 bln NOK, including debt * 12.5 crowns a share offer a 24 pct premium to 6-mnth avg * Pronova shares hit 12.7 crowns amid hopes of higher bid * Pronova owner: Price 'a bit low', higher bids unlikely (Adds details, background, quote by seller) By Ludwig Burger and Ole Petter Skonnord FRANKFURT, Nov 21 (Reuters) - Germany's BASF is buying a maker of fish oils used in heart drugs and food supplements for an agreed $845 million, seeking steady growth in nutrition markets to complement its more volatile chemicals and plastics businesses. The deal with Norway's Pronova BioPharma is the latest in the nutrition sector, a rare beacon of growth in consumer markets suffering from a faltering global economy. German rival Bayer on Tuesday withdrew its interest in U.S. vitamin maker Schiff Nutrition following a higher bid from Reckitt Benckiser. Shares in Pronova, which supplies the omega-3 heart medicine Lovaza to GlaxoSmithKline, jumped to a high of 12.7 Norwegian crowns in early Wednesday trading, above BASF's offer of 12.5 crowns and signalling investors' hopes for a higher bid. However, BASF said it had the support of Pronova's management and binding commitments covering about 60 percent of Pronova's share capital, including the 50 percent held by Herkules Private Equity Fund. Herkules' endorsement of the bid, which offers a 24 percent premium to Pronova's average share price for the past six months, was lukewarm. But it played down the possibility of a higher offer. "The premium is a bit low but all in all, we are satisfied. This is still the best solution for shareholders," Herkules Managing Partner Gert Munthe said. "The process was initiated by Pronova. It is not likely there would be a higher bid. We have been in dialogue with other players and this is the best we could come up with," he added. The deal values Pronova at 4.85 billion Norwegian crowns ($845 million), including around 1.09 billion of debt. BASF has been buying into industries less exposed to economic fluctuations than its core chemicals and plastics operations, which cater to builders, carmakers and electronics companies. Its existing nutrition and health business had 1.48 billion euros in revenue in the first nine months of 2012, accounting for 2.5 percent of group sales. In May, it agreed to buy Equateq Ltd, a British maker of concentrated omega-3 fatty acids, for an undisclosed sum. The deal, which BASF plans to finance from available funds, is subject to a 90 percent acceptance threshold among Pronova shareholders. The detailed offer will be sent to Pronova's shareholders around Dec. 5. BASF expects to close the transaction in the first quarter of 2013. At 0930 GMT, Pronova shares were up 5 percent at 12.6 crowns. BASF shares were down 0.1 percent at 65.71 euros. ($1 = 0.7811 euros = 5.7336 Norwegian crowns) (Reporting by Ludwig Burger and Ole Petter Skonnord; Editing by Mark Potter) Link this Share this Digg this Email Reprints

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