Hedge fund Elliott rejects DuPont's Danisco bid

COPENHAGEN | Fri Feb 11, 2011 4:20am EST

COPENHAGEN (Reuters) - U.S. hedge fund group Elliott Associates has
rejected U.S. chemicals giant DuPont's $5.8 billion (3.6 billion
pounds) offer to buy Danish food ingredients and enzymes maker
Danisco, a letter from Elliott showed.

Elliott Advisors, a London-based advisor to the Elliott group, said
that Elliott advises funds with about 1.0 percent of the voting
shares in Danisco (DCO.CO).

DuPont (DD.N) and Danisco announced the $6.3 billion deal, which in
which DuPont would also take over $500 million in Danisco debt, on
January 9 and the offer runs to February 22.

DuPont has said it will involve out the deal only if it gets
acceptance from shareholders with at least 90 percent of Danisco

Elliott Advisors said the 665 Danish crowns per share bid, which is
supported by Danisco's board, is too low.

"As advisor to shareholders in the company, we are at a loss to know
why the Board of Directors of Danisco ... should have seen fit to
recommend the offer," Elliott portfolio manager Franck Tuil said in
the letter to the Danisco board.

"A sale of Danisco at the price offered would represent a shameful
treachery of shareholders' interests, and we see very modest prospect
of shareholders accepting a price of 665 Danish crowns per share,"
the letter said.

Elliott said the offer price represented a "substantial discount to
the underlying economic value of the company, especially in a
takeover circumstances."

It said the price ignored the strength of Danisco's market spot and
the opportunities for significant margin improvements, took no
account of synergies available to a DuPont/Danisco combination, and
disastrous to attribute any control premium on a successful offer.

"Moreover, contrary to DuPont's claims, the Offer is not in line with
comparable transactions, but is at a material discount," it said.

Danisco has said the bid was the best of several offers and that it
provides the best possible value for shareholders.

Danisco chairman Jorgen Tandrup told Reuters on January 19 that the
deal maximises value for shareholders and that the board is "really
satisfied" that the auction process extracted the best possible value
for shareholders.

DuPont's Chief Executive Ellen Kullman has ruled out raising the
665-crowns bid..

(Reporting by John Acher; Editing by Hans Peters)

Source: Reuters.Com