Rockwood may be a possible takeover target - analysts

By Rizza Sta. Ana

Sep 27, 2013 07:31 AM EDT

According to analysts, investors were turning to Rockwood Holdings Inc after the company had sold almost USD4 billion of its assets this year. Just last week, the world's largest producer of lithium products sold its volatile titanium-dioxide assets to  Huntsman Corp. Goldman Sachs Group Inc said that the recent sale would incite interest in taking over the rest of Roockwood, which is worth USD5 billion.

First Analysis Securities Corp analyst Michael Harrison said, "Rockwood's days as an independent company are probably numbered. It seems to me that it's a more attractive takeout candidate. The lithium business is something that I think a lot of chemical and energy companies would be interested in." Rockwood now has two remaining but attractive businesses: its lithium for rechargeable batteries and surface treatments applied to cars and airplanes.

Rockwood's stock reached its record share price high in eight years last week. The stock price yesterday was also up 35% this year. According to data compiled by Bloomberg, the USD7.1 billion enterprise value of the company was 12 times analysts' average estimates for 2014 EBITDA or earnings before interest, taxes, depreciation and amortization.

Rockwood spokeswoman Nahla Azmy had not responded to Bloomberg's request for a comment about the matter. 

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