Henkel Says P&G’s Bid Not Acceptable

Duesseldorf, Germany-based Henkel said Procter & Gamble’s offer for rival German consumer goods group Wella was not acceptable in its current form and it was too early to say what it would do with its 7% stake.

“Naturally Procter & Gamble’s offer for Wella’s preference shares in not acceptable,” Henkel chief executive Ulrich Lehner said in a speech at the group’s annual shareholders meeting. Mr. Lehner said a complex takeover process would become much easier for P&G if it were to reduce the difference in price between the offers for ordinary and preference shares. “Given the price offered for the ordinary shares, the offer for the preference shares seems very low,” Mr. Lehner said.

The producer of brands such as Persil washing powder and Loctite glue last month lost its long-running courtship of smaller German rival Wella after U.S. giant Procter & Gamble agreed to buy a controlling stake from family shareholders in a deal valuing Wella at 6.5 billion euros ($6.98 billion).

Henkel announced shortly before the deal it had quietly accumulated a 6.86% stake in Wella, a move many saw as a last-ditch attempt to deter P&G’s bid. One of Wella’s major institutional shareholders told Reuters last week he would not accept the current offer and that investors were talking about ways of forcing P&G to up its bid.

Procter & Gamble has offered 92.25 euros for each of Wella’s ordinary shares which carry voting rights, but just 61.50 euros for the preference shares.

Henkel holds 4.99% of Wella ordinary shares and 10.38% of the lower-valued preference shares. The firm, which said last month it expected 2003 operating profit to rise by almost 10% with sales climbing 4%, also said it was confident of meeting its targets for this year.