BASF, of Ludwigshafen, said it would pay Nkr12.50 per ProNova share, a 4.2% premium to the shares' close Tuesday and 24% more than their six-month average.
"The acquisition makes sense and isn't too expensive. It'll make them the leader of this quickly growing market," Equinet Bank AG analyst Nadeshda Demidova wrote.
The German chemicals company has been using its pocketbook to pour into markets it thinks will be big in the future. In September it announced a €785 million ($1 billion) acquisition of Ames, Iowa-based agrochemicals company Becker Underwood Inc. from financial investor Norwest Equity Partners.
And, earlier this month, it sealed an asset swap with Russia's OAO Gazprom that will give it access to Russian natural gas fields in exchange for European gas trading and storage operations. It also agreed to pay as much as $1.45 billion as well as rights to some oil production to gain minority stakes in three Norwegian oil projects owned by Norway's Statoil ASA.
In the ProNova agreement, BASF said majority owner Herkules has already committed its 50.01% direct share and fellow Norwegian financial investor Kistefos AS has also committed its 9.1% indirect stake to the takeover. An additional 0.3% has been tendered by executives at the Lysaker, Norway-based target.
The deal is gravy for Herkules. The Norwegian company -- then known as Ferd Private Equity -- bought 80.1% from Norsk Hydro ASA for Nkr165 million in 2003.
Nearly two years later it mopped up the remaining stake from Norsk for an additional Nkr225 million.
Herkules in 2007 sold much of its stake in ProNova's initial public offering, with the investor reaping Nkr1.6 billion, well above what it originally paid. Still, the stock hasn't performed well -- it debuted at Nkr23, just under twice what BASF is now paying.
The target is developing new types of omega-3 compounds for use in drug development. The fatty acids are popular in treatments for cardiac ailments, which are on the rise along with other wealth-related maladies.
In the third quarter, ProNova revenue rose 9% over the same period a year earlier to Nkr427.9 million. Ebitda rose 15.9% to Nkr208.7 million. ProNova's net debt as of the end of the third quarter was Nkr1.1 billion.
BASF said it will need shareholders representing 90% of the target's share capital to commit their shares to the deal for it to proceed. It hopes to close the offer in the first quarter of 2013 and will pocket a Nkr60.6 million breakup fee should ProNova accept another offer.
Morgan Stanley is financial adviser to ProNova.
Boies, Schiller & Flexner LLP hired Assistant U.S. Attorneys Peter M. Skinner, Matthew L. Schwartz and John T. Zach from the U.S. Attorney's Office, SDNY. For other updates launch today's Movers & shakers slideshow.
The Franklin, Tenn.-based company -- which had been embroiled in a struggle with an activist investor last year -- has circulated books, with first round bids due recently More video