Mexichem Ups Wavin Bid, Gains Access To Books

Mexichem raised its offer over the holidays for plastic pipe systems manufacturer Wavin, which in turn allowed the Mexican company access to its books. Mexichem is now offering EUR10 per share for Wavin. This comes after a series proposals including a EUR9 offer on Dec 6, and EUR8.5 per share on November 22. Wavin directors have decided that the negotiations have shown “good progress” in a number of “non-financial” terms and considered that the latest offer merited “access to due diligence information,” the company says. Officials at Mexichem and Wavin could not immediately be reached for comment. The latest offer values Wavin at an enterprise value to Ebitda of almost 8x, assuming 50.8m outstanding shares valued at EUR507m, net debt between EUR300m and EUR330m, and Ebitda of EUR100 to EUR105m, according to people familiar with the deal. The negotiation has also involved a number of corporate governance issues including the management makeup post acquisition and details regarding employee rights, according to a person with knowledge of the negotiation. Another issue is Wavin’s leverage which stands close to bridging established debt covenant levels, the person notes. Barclays and Citigroup are serving as Mexichem’s advisors, while Bank of America Merrill Lynch is advising Wavin.