October 03, 2016 - 7:43 AM
TORONTO - Chemtrade Logistics Income Fund is making a takeover offer directly to Canexus Corp. shareholders, despite opposition from the Calgary-based chemical company's board of directors.
Toronto-based Chemtrade (TSX:CHE.UN) is offering $1.50 cash per share of Canexus (TSX:CUS), which produces sodium chlorate, a chemical used by the pulp and paper industry.
Chemtrade says its offer values Canexus at $884 million, including debt obligations it would assume.
The offer is below the $1.52 Canexus closed at on Friday, but higher than its previous non-binding expression of interest at $1.45 per share cash, announced Sept. 14.
Canexus stock and Chemtrade units showed little movement after the Toronto stock market opened.
Chemtrade said earlier that its revised offer is fair and in line with what was offered by Superior Plus, which had attempted a friendly deal with Canexus that fell apart after a U.S. agency said it would raise objections.
The U.S. Federal Trade Commission said in June that it would try to block the transaction because of its impact on competition in North America's sodium chlorate market.
Note to readers: This is a corrected story. A previous version said Chemtrade had previously bid $1.42 per Canexus share.
News from © The Canadian Press, 2016