Hercules Inc. bid $1.8 billion in cash Monday for Allied Colloids Group PLC. But the United Kingdom maker of specialty chemicals rejected the bid as too low, a move that could open a bidding war for it.
Wilmington, Del.-based Hercules has a sizable war chest for specialty-chemicals acquisitions after divesting itself of products ranging from rocket fuel to artificial flavors.
Its bid came just after Allied Colloids ended talks with another suitor, and may have to be sweetened if Hercules, with more than $2 billion in sales, wants to overcome resistance from Allied, which has about $740 million in annual sales.
Allied Colloids said Friday it ended talks with another unnamed suitor, said by newspapers to be Laporte PLC. A Laporte spokesman said a bid from the fourth-largest U.K. chemicals company, which had 1996 sales of $1.54 billion, couldn’t be excluded. He declined further comment.
Allied Colloids makes acrylic-based chemicals that are used in water treatment and paper processing.
