US WR Grace to review $4.3bn upped bid from 40 North

HOUSTON (ICIS)–WR Grace announced it will review top shareholder 40 North’s unsolicited proposal of $65 per share in cash, up from an earlier bid of $60 per share, the US-based catalyst producer said on Monday.

WR Grace outright rejected the earlier proposal in November.

The new proposal represents a premium of 62% over the company’s share price in October and a 16% premium from Grace’s closing share price on Friday.

In November, WR Grace rejected the first bid, arguing it undervalued the company.

In a statement, WR Grace said that it will review the updated proposal to determine “the course of action it believes is best for the company and shareholders”.

40 North, a privately held investment firm that is part of Standard Industries, owns a 14.9% stake in WR Grace, making it a top shareholder. Standard Industries describes itself as the world’s largest roofing and waterproofing manufacturer, with other businesses that make building materials.

In a letter to WR Grace’s board, 40 North principals David Millstone and David Winter said: “Grace offers a strong and unique—but unrealised—value proposition that can make it a standout player in the world of specialty chemicals”.

“Allowing the company to continue along its current path, however, guarantees only that the value destruction at Grace will continue and worsen, consistent with its track record since the spin-off of GCP in 2016,” said Millstone and Winter.

WR Grace produces catalysts that are used to make fuel and polypropylene (PP).

Thumbnail image shows PP. Photo by Al Greenwood