It's acquisition target, American refiner cum petrochemical player LyondellBasell, has refused to accept its revised offer of $14.5 billion and wants more. Is this a setback for RIL or a blessing in disguise?
RIL’s plan to become a global petrochemical player by acquiring bankrupt petrochemical company LyondelBasell has received a major jolt, as the lead creditors of LyondellBasell have rejected its revised offer $14.5 billion.
According to sources, private equity firm, Apollo Management, a lead creditor for LyondellBasell, wants Reliance to raise its offer. In case it fails to do so, Apollo is ready to merge LyondellBasell with its subsidiary Hexicon Specialty Chemicals.
Meanwhile, LyondellBasell has submitted a new reorganisation plan to the US bankruptcy court that seeks transfer of ownership to creditors including Apollo Management.
And as expected, the market cheered Apollo's rejection of RIL’s bid for LyondellBasell.
Chokkalingam G, head of equity research at Barclays Wealth, said, “Markets have a tendency of not cheering any big merger and acquisition (M&A). We have seen this in past and same is the case even now.”
Though RIL did not respond to NDTV's queries, with the rejection of its revised bid the final verdict of the US bankruptcy court is the only hope left.
In case it loses in the final round, RIL's new M&A team is already on the hunt for energy assets in Southern America or Canada.
source: http://beta.profit.ndtv.com/news/show/lyondell-creditors-reject-rils-offer-28330
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