Abu Dhabi National Oil Company (ADNOC) has made a larger initial offer to acquire the German chemical company Covestro, with concessions being offered in preparation for the start of the due diligence process, people familiar with the matter said.
State-owned ADNOC has offered a new price of about 60 euros per share, bringing Covestro's valuation to 11.3 billion euros ($12.4 billion), according to the people.
The people, who requested anonymity because the information is private, added that ADNOC also pledged functional guarantees for several years, in addition to investments worth $8 billion after the completion of the deal.
Some people noted that Covestro is considering a response to the offer. While a representative from ADNOC declined to comment. A Covestro spokesman requested the aforementioned statements in a statement issued in early September, which explained that the company was holding open discussions with ADNOC, declining to comment further.
Negotiations for ADNOC's acquisition of Covestro
Bloomberg News reported last Tuesday that the Middle Eastern energy giant is working to improve the offer to satisfy at least some of Covestro's shareholders.
Union Investment, a German fund management company among the 15 largest investors in Covestro, on Tuesday called on the company's management to give ADNOC access to due diligence after a Bloomberg report on plans to improve the potential offer.
For his part, Arne Rautenberg, who works as a fund manager at Union Investment, said via an emailed statement: From our point of view, such an offer meets the basic condition for the Board of Directors of (Covestro) to enter into in-depth takeover negotiations with (ADNOC).
