March 16, 2018 / 9:52 AM / 2 years ago

Lanxess drops out of bidding for Akzo Nobel unit - sources

FRANKFURT/LONDON/NEW YORK (Reuters) - Germany’s Lanxess (LXSG.DE) has dropped out of a consortium bidding for Akzo Nobel’s (AKZO.AS) speciality chemicals business, two people close to the matter said.

A logo of Lanxess is seen next to dark clouds at Cologne Bonn airport March 27, 2015. REUTERS/Wolfgang Rattay

U.S. private equity firm Apollo (APO.N) and consortium partner Dutch fund PGGM remain in the running, the sources said.

Other bidders include private equity firm Carlyle Group (CG.O), Dutch investor Hal Investments, and Advent International partnered with Bain Capital Private Equity, they said.

The speciality chemicals business is seen being worth around 9 billion euros ($11.1 billion) as the sources said Akzo is looking for a multiple of more than 8.5 times the unit’s 2018 EBITDA, which analysts forecast at 1.03 billion euros.

The business accounts for a third of Akzo’s sales and earnings.

Akzo is making changes as it looks to placate investors after it rejected a takeover offer from PPG Industries (PPG.N) last year.

One source said that Hal might act as an anchor investor if Dulux paint maker Akzo decides on a stock market listing for its speciality chemicals business instead of an outright sale.

A spokeswoman for Akzo Nobel said the company stood by previous statements that a mix of strategic players and private equity investors are bidding for the business. The company declined to comment on bidders’ names.

Lanxess, Apollo, PGGM, Carlyle, Advent, Bain and Hal Investments declined to comment.

Akzo Nobel has asked for final bids by March 23. At its annual earnings on March 8, Akzo said it was still on track for the separation of its speciality chemicals division by next month.

($1 = 0.8118 euros)

Additional reporting by Toby Sterling and Ludwig Burger; Editing by Maria Sheahan, Jason Neely and Mark Potter

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