Evonik rejects BASF bid despite sweetened $12.5 billion terms

By Matthias Inverardi

DUESSELDORF, Oct 30 (Reuters) - German chemicals group Evonik said on Friday that BASF's sweetened takeover offer was not enough to persuade it to start formal deal talks, but it has asked the suitor's management to elaborate on the rationale for its bid.

"The Executive Board remains focused on its strategic direction and further development of Evonik as an independent company," it said in a statement.

According to a person familiar with the matter, Evonik remains unconvinced by the industrial logic behind a merger of the two groups.

BASF last week made an improved offer worth €11.18 billion ($12.5 billion) or €24 per share, for a takeover which its CEO Markus Kamieth said would offer a "strong German response to global competition," while stressing BASF would not overpay.

EVONIK REJECTED BID IN SEPTEMBER

BASF, one of the world's largest chemical companies by revenue, improved its bid last week from an original €22.15 per share, which Evonik had rejected in September.

On Friday, BASF expressed surprise that Evonik was not prepared to consider its "attractive offer" and "extensive commitments made regarding employees and sites."

"However, we acknowledge Evonik's willingness to engage in discussions," it said in a statement.

Evonik's products include high-tech plastics and feed additives, as well as ingredients for coatings and household products. BASF makes engineering plastics, superabsorbent polymers, vitamins and chemicals for industrial uses.

BASF has said it would honour existing agreements to preserve jobs made by Evonik in the event of an acquisition and warned that more painful takeover approaches from abroad were looming.

People familiar with the matter have told Reuters that Evonik itself had been exploring an acquisition of US rival Ashland for some time.

Evonik CEO Christian Kullmann, who went on medical leave in August, previously said there would be consolidation in the industry and Evonik wants to play an active role in it.

(Reporting by Matthias Inverardi; Writing by Ludwig Burger and Matthias Williams; Editing by Kirsti Knolle and David Holmes)