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Merck KGaA goes hostile in $5.9 billion Versum takeover battle

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Merck KGaA goes hostile in $5.9 billion Versum takeover battle
FILE PHOTO: A logo of drugs and chemicals group Merck KGaA is pictured in Darmstadt, Germany January 28, 2016. REUTERS/Ralph Orlowski/File Photo   -   Copyright  Ralph Orlowski(Reuters)
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By Ludwig Burger

FRANKFURT (Reuters) – German pharma group Merck KGaA on Tuesday sidestepped the management of takeover target Versum Materials and took its $5.9 billion (4.5 billion pounds) offer directly to the U.S. chemical company’s shareholders.

Versum, the former speciality chemicals division of industrial gases group Air Products, has since last month kept up its opposition to Merck’s unsolicited cash offer, saying it was committed to an all-share merger with U.S. rival Entegris agreed in January.

Merck on Tuesday kept the offer price unchanged from its previous proposal for $48 per share in cash. That compares with an offer of $38.8 worth of Entegris stock for each Versum share under the U.S. company’s existing deal, based on Entegris’ closing price of $34.68 on Monday.

“We are firmly committed to completing the acquisition of Versum and the tender offer is an unambiguous step towards that objective,” family-controlled Merck said in a letter to Versum shareholders after filing definitive proxy materials with the U.S. Securities and Exchange Commission.

Merck said it had secured fully committed financing from Bank of America Merrill Lynch, BNP Paribas Fortis and Deutsche Bank.

Merck Chief Executive Stefan Oschmann said at a press conference this month that the company had received renewed encouragement from the markets for its proposal.

Versum’s shares closed at $49.67 on Monday, reflecting hopes of a higher bid.

(Reporting by Ludwig Burger; Editing by Tassilo Hummel and Jane Merriman)

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