CALGARY – The board of Canexus Corp. (TSX:CUS) is advising its shareholders to reject a takeover offer from Chemtrade Logistics Income Fund, which values the chemical company at $884 million including assumed debt.
The Calgary-based sodium chlorate producer says its board believes Chemtrade’s offer of $1.50 per common share is too low.
Chemtrade said on Oct. 3 that it was taking its offer directly to shareholders of Canexus, due to opposition from its board.
Chemtrade has said 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.
Since Chemtrade’s offer to shareholders two weeks ago, Canexus has appointed David Collyer as chairman of its board following the death of Hugh Fergusson, 68, who died in his sleep unexpectedly.
Billionaire energy executive Murray Edwards, chairman of Canadian Natural Resources (TSX:CNQ), also increased his stake in Canexus to 9.5 per cent by acquiring an additional 1.2 million shares after the Chemtrade offer.
Canexus said Wednesday that its directors’ circular will be mailed to shareholders with more detail about the “extensive engagement” between the two chemical companies.
“The Chemtrade offer does not represent full and fair value for Canexus,” said Art Korpach, who chairs the Canexus board’s special committee for evaluating proposals and alternatives.
“We have a strong ongoing business that is positioned to deliver increased value to shareholders. As demonstrated by past behaviour, your board is not opposed to a sale of the company as long as a sale reflects full and fair value for our assets and our growth potential. The Chemtrade offer simply doesn’t do that.”
Canexus shares closed Tuesday at $1.51 per share.