Dow Chemical Shares Rise On Report Of Buyout Bid

Monday, April 9th 2007, 8:04 am

By: News On 6

NEW YORK (AP) _ Shares of Dow Chemical Co. rose about 5% Monday after a British newspaper reported a group of Middle Eastern investors and U.S. buyout firms was preparing a bid for the huge chemicals and plastics maker.

The Sunday Express, a British tabloid, reported over the weekend that the group has secured financing for a $50 billion bid for the Midland, Mich.-based chemicals company. That would be the biggest leveraged buyout ever.

The Express reported the investment team, which includes private equity firm Kohlberg Kravis Roberts & Co., is preparing a bid of $52 to $58 per share. At the low end, that would be a 17 percent premium over Dow Chemical's closing stock price of $44.47 on Thursday on the New York Stock Exchange. The market was closed on Good Friday.

Dow Chemical's stock jumped $2.18 to $46.65 in Monday afternoon trading on the New York Stock Exchange after rising to a new 52-week high of $47.60 earlier in the session.

The newspaper said a bid of between $52 to $58 a share could come this week, with half the financial backing coming from investors in Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman, and half from U.S. investors.

The newspaper didn't name any investors other than KKR and did not cite sources.

A KKR spokeswoman declined to comment on Monday. Messages seeking comment were left at Dow Chemical.

A $50 billion takeover of Dow Chemical would be the biggest leveraged buyout to date. A $32 billion takeover of energy company TXU Corp. that was announced in February would be the largest such deal if it is completed. KKR and Texas Pacific Group are leading the bidding group for TXU.

Dow Chemical makes and sells chemicals, plastics and farm products to customers in a range of industries. In 2006, Dow Chemical reported it earned $3.72 billion on sales of $49.1 billion.