Kuwait asks for more info from Hoechst AG on Rhone merger

FRANKFURT, FEB 20: Hoechst AG said its biggest shareholder, Kuwait, had asked for more information on the group's planned merger with Fra...

FRANKFURT, FEB 20: Hoechst AG said its biggest shareholder, Kuwait, had asked for more information on the group’s planned merger with France’s Rhone-Poulenc, while a second major shareholder was reported also to have reservations about the deal.

Hoechst chief executive Juergen Dormann said in a magazine interview to be published on Monday that he was confident of securing Kuwait’s approval of the deal by the annual shareholder meeting on May 4. But he conceded that Kuwait wanted more information on the merger. His comments came after Kuwait oil minister Sheikh Saud Nasser al-Sabah told Reuters Wednesday that the merger did not serve Kuwait’s interests. Kuwait owns 24.5 % of Hoechst through state-owned Kuwait Petroleum Corp (KPC) and could prevent the merger which requires the support of at least 75 % of the drug and chemical maker’s share capital.

News magazine der Spiegel quoted Dormann as saying: "We have been cooperating successfully with the Kuwait Petroleum Corporation in the supervisory boardfor more than 18 years. But our shareholder has requested information which we are of course supplying."

Asked if there was a danger Kuwait may not approve the merger, Dormann said: "I am confident that we will obtain the approval to submit the project to the annual shareholders meeting at the start of May."

Meanwhile, Welt am Sonntag reported that Dresdner Bank AG, which controls a 10.2 percent stake in Hoechst through the holding company Gesellschaft fuer Chemiewerte, had also voiced reservations about the merger.

Dresdner could not immediately be reached for comment.

Welt am Soontag reported that while the supervisory board had agreed in Principle to the merger at a meeting on December 8, the representatives of Kuwait and Gesellschaft fuer Chemiewerte had complained about a lack of information concerning the deal.

As a result, an extraordinary supervisory board meeting set for January 22 had been cancelled, the newspaper reported.

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Hoechst has about 330,000 shareholders and about45 percent of its shares are in foreign hands.

Hoechst and Rhone have said their goal is a 50-50 merger but in recent weeks have indicated that the final valuation, which will be determined by an independent assessment, may be different. Hoechst is generally considered by analysts to be worth more than its French partner. Dormann said in the Spiegel interview: "Hoechst may come out in front. But according to our current estimate there will not be a major divergence from 50:50."