LEVERKUSEN (dpa-AFX) - Chemicals group Covestro now wants to talk to Abu Dhabi National Oil (Adnoc) after weeks of speculation about its interest. The Covestro Board of Management decided to enter into open-ended talks in view of the interest expressed by Adnoc, the DAX-listed group announced on Friday evening. This means that both companies can now discuss details of a possible acquisition. Most recently, there was talk in the media that the Arabs had informally held out the prospect of 60 euros per share, which would value Covestro at 11.6 billion euros.

How high an offer would have to be to meet with Covestro's approval, however, remains open for the time being. "Whether, in what form and, if so, on what terms an agreement will be reached between the parties to the talks is open," the Leverkusen-based company stressed.

Covestro shares rose to a high since February 2022 on Monday morning at 53.56 euros, most recently leading the Dax with a gain of another 3.69 percent to 53.40 euros. They thus extended their Friday gains of just under eight percent. On Friday afternoon, the Bloomberg news agency had already reported that Covestro was likely to be open to talks before the end of the week. As a result, the share price skyrocketed.

There has been speculation about Adnoc's interest since mid-June, when the shares were still trading at around 40 euros. However, Covestro CEO Markus Steilemann's management has since avoided any specific comment on the subject, repeatedly saying that it would not comment on speculation. According to reports, the two sides have not spoken to each other directly, but have only communicated informally via investment banks and lawyers.

The reason for the fall in the share price until the Adnoc rumors arose was first the global supply bottlenecks and production problems in the Corona pandemic, and most recently the sluggish global economy. The plastics group felt weakness in the construction industry and the reluctance of many consumers to buy consumer electronics, household appliances and furniture. If these sectors weaken, demand for the company's rigid and flexible foam intermediates, which are processed into insulation, upholstery and the like, also slows. And hard plastics, polycarbonates, for example for laptop and smartphone housings, are then also less in demand.

Analyst Markus Mayer of Baader Bank has had Covestro on his radar as a takeover target for more than a year. This is because the group's valuation was below the sum it would take to replicate all its production facilities. In addition, the company's mature technology and cost leadership in production are convincing.

In addition to his valuation of the company, Mayer also takes into account a possible takeover with a probability of 30 percent at a price of 70 euros per share. After Friday's announcement, this probability could increase, the expert wrote in a study available on Monday.

For analyst Sebastian Satz of the British investment bank Barclays, the rumored 60 euros per share is also rather low. However, the amount could be sufficient to start takeover talks, as the plastics group's shares have rarely traded above this level in the recent past, the expert had said in mid-August.

Christian Faitz of the investment house Kepler Cheuvreux also sees scope above 60 euros. A strategic investor could put up to 70 euros per share on the table, he believes. Covestro would be an "excellent fit" for Adnoc as a market leader in polyurethanes and polycarbonates with modern production facilities and a more than interesting customer list that includes the entire automotive value chain as well as numerous manufacturers of household and consumer electronics and many more.

Adnoc has been expanding its involvement around the chemical business for some time. The group claims almost all the oil for the United Arab Emirates. It has investment plans of US$150 billion (Eur140.2 billion) to expand its business in natural gas, chemicals and clean energy globally.

This is because the Persian Gulf oil producer wants to broaden its business, which has so far focused on the sale of crude oil, gasoline and diesel. In addition, Adnoc is thus trying to improve its position in the competition with the oil company Saudi Aramco.

Last year, Adnoc had already acquired shares in the Austrian oil and gas group OMV./mis/gl/nas/lew/ngu