Rhône Capital makes mandatory tender offer for S&B minority shareholders

By John Ollett
Published: Friday, 22 February 2013

A mandatory tender offer was launched for the minority shareholders of Greek minerals and materials group S&B Industrial Minerals in late January by former Almatis owner Rhone Capital LP’s Fund IV.

A mandatory tender offer was launched for the minority shareholders of Greek minerals and materials group S&B Industrial Minerals in late January by former Almatis owner Rhone Capital LP’s Fund IV.

The minority shareholders have been notified of the offer, officially launched on 30 January through Delphi Luxembourg Holdings SËRL, which is indirectly wholly owned by Rhone Capital.

Under the terms of the offer, the 61.26% majority shareholders, who are members of the Kyriacopoulos family including Ulysses Kyriacopoulos, chairman of S&B, Flora-Maria Kyriacopoulos, a non-executive director and Aikaterini Kyriacopoulos, among other family members, are to maintain their current share in S&B with Ulysses remaining at the helm as chairman.

The minority shareholders, including the largest minor shareholder SCR Sibelco NV, hold 38.74% of S&B’s share capital. They will be offered Û5.80/share ($7.74*/share) by the New York-based fund.

Sibelco, which has a 19.96% holding, has committed to accept an offer by Rhone Capital when it is made, subject to certain conditions. In addition, Sibelco gave “undertakings not to sell their shares, accept or vote in favour of any offer, merger or similar transaction which is in competition with the proposed offer or enter into discussions or negotiations with respect to any competing transaction,” Delphi noted at the time.

Once the offer is passed, Rhone Capital intends to delist the company from the Athens Stock Exchange. Delphi added: “If following completion of the mandatory offer, 90% of the shares and voting rights in the company are acquired, the exercise of a squeeze-out right shall follow according to article 27 of the Law, following which the delisting of the company from the Athens Exchange will be sought.”

The minority shareholders have been notified of the offer and a squeeze-out policy will be used to acquire any unsold shares, provided that Rhone and the Kyriacopoulos family’s holding passes 90%.

All arrangements are subject to anti-trust agreements in Greece, Germany and the Ukraine, Delphi said.

Since the announcement of the mandatory offer there have been several share transactions reported on the Athens Stock Exchange.

Members of the Kyriacopoulos family, Paris, Aikaterini, and Alexia, all contributed their S&B shares to High Gate Holding SA in exchange for shares in High Gate, which is exclusively controlled by Ulysses Kyriacopoulos

Rhone Capital: experienced in industrial minerals

Rhone Capital is no stranger to industrial minerals and has been involved in the buying and selling of several large companies in the past few years.

In 2003, Rhone Capital acquired Alcoa Speciality Chemicals from Alcoa World Alumina & Chemicals, and renamed the business Almatis.

In 2007, it sold this business to Dubai International Capital (DIC), for an undisclosed sum. It is understood, however, that DIC is now in the process of renegotiating the terms of its $1bn loan, underwritten by investment bank UBS, which it used to buy Almatis.

In early 2007, the entire LWB Refractories group, including the Chinese joint venture Shanxi LWB Taigang Refractories Co. Ltd and the US operations in York, Pennsylvania, were bought by Rhone Capital.

In September the following year, the fund sold these operations to leading Brazilian magnesite producer, Magnesita Refratarios SA.

Rhone Capital has also invested in firms including Evonik and Arizona Chemical.

S&B buys 50% of bentonite producer

Also in January, S&B reached an agreement to acquire a 50% stake in Chaoyang GoldCommon Mining Co. Ltd (GC) for Chinese Renminbi (Rmb) 37.1m ($5.94m*), which will be financed through the company’s existing facilities.

The remaining 50% of the company will be retained by the seller, Beijing Dongxinlian GoldCommon Investment Management Co., Ltd.

GC is based in Liaoning province, China, and has a production capacity of 150,000 tpa bentonite and “has access to high quality bentonite reserves for supplying the metallurgy and foundry segments,” the company said.

“This transaction represents an extension of our market to mine business model in the fast growing and significant Asia/Pacific region (...) enhancing our product portfolio with local bentonite reserves and providing access to the foundry and metallurgy segments in an important region, where we had previously lacked an established presence,” said Kriton Anavlavis, CEO of S&B.

*Conversions made February 2013