BaFin, the German stock market regulator, is reported by the Wall Street Journal to be investigating possible insider trading in Celanese shares in the days leading up to the US private equity firm Blackstone Group’s €3.1 billion offer in December 2003.
Blackstone published its bid before markets opened on December 16, and shares opened 13 percent higher that day. BaFin spokesperson Sabine Reimer told the Wall Street Journal that an increase in the share price of that size automatically triggers a routine investigation.
She added that in this case the investigation resulted in ‘conspicuous findings’ that have caused a formal insider trading probe. “That means that we are asking all banks to disclose for whom they have done the trading in the shares in the period in question,” she was quoted as saying.
The news took some of the gloss off Blackstone’s successful completion of the takeover yesterday after succeeding in winning 83.6 percent of Celanese shareholder votes. When Blackstone first revealed the terms of its offer, it set a minimum acceptance threshold of 85 percent, but lowered this to 75 percent in March amid doubts that the threshold would be reached.
Winning at least 75 percent of votes enables Blackstone to implement a domination agreement, allowing a bidder to take control of a target regardless of whether the remaining shareholders decide to retain their positions or sell up.
The deal is the largest public-to-private buyout in Germany to date and the first dual jurisdiction tender offer in Germany and the US since the Takeover Act was enacted in Germany at the beginning of 2002.
Celanese is listed on both the Frankfurt and New York stock exchanges, having been a US company before being acquired by Hoechst, which then spun it off via an IPO in 1999. The spin-off was part of a disposal programme launched at the time of Hoechst’s merger with Rhone Poulenc to form Aventis, which resulted in the combined entity’s exit from all non-pharma activities.
Hanns Ostmeier, who led the deal on behalf of Blackstone, said the firm would be making capital available for add-on acquisitions to parts of the business, while the management team will continue to dispose of subsidiaries in other areas.