The board of bankrupt LyondellBasell Industries AF rejected a bid from Reliance Industries Ltd., an oil refiner and explorer controlled by India's richest man, two people briefed on the matter said today.
Lyondell spokesman David Harpole declined to comment. Reliance, based in Mumbai, had raised its offer for a controlling stake in the Rotterdam-based chemicals maker to $14.5 billion, two people with knowledge of the offer said Feb. 22. The revised bid allowed Lyondell creditors to opt for cash or equity, they said.
"Debt holders at LyondellBasell may feel they can get better value elsewhere," said Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein. "For Reliance, they were offering what I thought was at the top end of what they should be paying. You have to question whether it is worth them paying more for what they thought were discounted, distressed assets."
Buying LyondellBasell would create a company with more than $80 billion in revenue and give billionaire Mukesh Ambani's Reliance chemical plants and two oil refineries in the US and Europe. The chemicals maker had rejected a revised Reliance bid that valued it at $13.5 billion, the Wall Street Journal reported Jan. 8.
"The synergies are not so great that it is worth paying much more," Beveridge said by telephone.
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