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Strategies & Market Trends : Speculating in Takeover Targets
CTG 8.520-0.5%May 27 4:00 PM EDT

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To: richardred who wrote (2296)12/21/2010 10:56:09 AM
From: richardred  Read Replies (1) of 6275
I Hit the Takeover bullseye today with MATK-Entered at 20.60-in July-Nice weighted position for me also. :+ )

DSM to buy US biotech company Martek for $1.09B
Martek Biosciences accepts $1.09 billion cash bid from Dutch chemicals maker DSM

On Tuesday December 21, 2010, 10:09 am

AMSTERDAM (AP) -- Royal DSM NV, the world's biggest maker of vitamins, said Tuesday it will bid $1.09 billion (euro830 million) in cash for U.S. biotech firm Martek Biosciences Corp., in a management-endorsed buyout that would improve its presence on the American infant formula market.

The Dutch chemicals company's $31.50 per share offer for Martek represents a 35 percent premium to Martek's closing price on Dec. 20. In U.S. premarket trading, Martek shares surged $8.04, or 34.4 percent, to $31.40.

DSM, based in Heerlen, the Netherlands, makes nutritional supplements, fibers used in bulletproof vests, and ingredients used in vaccines, as well as industrial chemicals.

DSM's CEO Feike Sijbesma said the purchase "will add a new growth platform to our nutrition business," while Martek would benefit from DSM's larger distribution network.

Martek, based in Colombia, Maryland, sells nutritional oils, ingredients for infant formula and dietary supplements. Its customers include Danone, Nestle, Kellogg's and General Mills, among others.

DSM said its offer will begin in mid-January and is conditional on receiving a majority of shares. It expects the deal to close sometime in the second quarter.

DSM said the deal, which must also be approved by regulators, would add at least euro0.15 to annual per share earnings in the first year.

Shares in DSM rose 4.5 percent to euro42.845 in Amsterdam.

In November, DSM reported a third quarter net profit of euro79 million, or euro0.76 per share, on sales of euro2.15 billion. As of Tuesday, the company has a stockpile of more than euro2 billion in cash due to profits and recent sales of several low-margin businesses.

Martek earlier this month reported a fiscal fourth-quarter loss of $6.2 million on higher costs and a hefty restructuring charge linked to the sale of assets at its Winchester, Ky., manufacturing facility. Revenue rose 36 percent to $119.1 million, on higher sales of nutritional ingredients and branded consumer health products. The results topped analysts' average estimates.
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