DOW AGRO COULD MERGE OR GO PUBLIC. PLEASE READ THE SECOND PARAGRAPH. THIS COULD BE RELATED TO EESO. UPDATE: Dow Chemical CEO: Evaluating Divestiture Of Dow AgroSciences
Date : 04/30/2009 @ 11:45AM
Source : Dow Jones News
Stock : Dow Chemical Co. (DOW)
Quote : 16.0 2.49 (18.43%) @ 8:00PM
UPDATE: Dow Chemical CEO: Evaluating Divestiture Of Dow AgroSciences
(Updates with additional conference call comments on possible deal timing and strategy beginning in third paragraph.)
By Bob Sechler
Of DOW JONES NEWSWIRES
Dow Chemical Co. (DOW) Chief Executive Andrew N. Liveris said Thursday that a "rigorous evaluation" is under way regarding a possible divestiture of the company's agriculture unit, Dow AgroSciences.
Liveris, speaking on a post-earnings conference call with analysts, said a sale, joint venture or initial public offering all are possibilities for Dow AgroSciences, although he also stressed that no deal may take place.
He didn't cite a potential value for the unit but said Dow Chemical likely will decide its fate within the next 90 days.
"There are very serious bidders on the business [and] we are very seriously engaged with them," Liveris said.
Dow Chemical has been moving to shed assets to pay down debt from its recent $16.3 billion acquisition of specialty chemicals maker Rohm & Haas Co. Earlier this month, Dow announced the $1.68 billion sale of Rohm's profitable Morton salt division.
On Thursday, Liveris outlined what he estimated at $23 billion to $26 billion in ongoing or possible divestitures, including previously announced deals such as the one for Morton Salt.
But he stressed that Dow Chemical has "optionality" on all of the possible deals and plans to seek "full value," meaning they all may not take place.
Liveris previously has mentioned Dow AgroSciences among possible divestiture candidates, although he told analysts last month that he would "listen to people who want to pay a decent price for that asset" but wasn't aggressively shopping it.
He said Thursday that Dow AgroSciences remains "strategic to Dow," but he added that investor interest in the agriculture sector renders it prudent to step up evaluation of a possible divestment.
"It is a property that sits inside a commodity chemical [valuation] multiple" and could be worth substantially more if liberated, Liveris said.
Overall, he said Dow Chemical is on track to pay back by the end of this year a bridge loan it took out for the Rohm & Haas acquisition.
"The bridge pay-down is Priority One," Liveris told analysts, but said Dow also will use excess cash from divestitures to grow its core businesses.
Dow shares were up 18.1%, or $2.45, at $15.96 in recent trading after the company posted a small but unexpected first-quarter profit.
-By Bob Sechler, Dow Jones Newswires; 512-394-0285; bob.sechler@dowjones.com
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