The prospect of a higher offer from oil giant Adnoc is boosting the shares of plastics group Covestro.

The shares rose by up to three percent to an annual high of EUR 54.68 in early trading on Tuesday, making them one of the biggest winners on the DAX. The Bloomberg news agency had previously reported, citing insiders, that Adnoc was preparing to increase its informal takeover bid and was prepared to make concessions in order to pave the way for a more detailed examination of the books.

The Abu Dhabi-based oil company wants to guarantee jobs for several years and investments of around eight billion dollars after a deal is completed, the agency reported, citing people familiar with the matter. In the coming days, Adnoc intends to submit an offer of around 60 euros per share, which would value Covestro at around 11.3 billion euros. However, the Group could also decide to wait until 2024.

No comment was initially available from Adnoc. Covestro did not wish to comment. The Leverkusen-based company had opened the door to talks with the potential takeover bidder in September. Whether, in what form and possibly on what terms an agreement would be reached was open and would depend on the course of the upcoming talks, the plastics group emphasized at the time. Covestro primarily wanted to discuss the implementation of its strategy, including corresponding regulations on corporate governance.

HIGHER OFFER ALREADY SIGNALED

The offer of around EUR 60 per share reported by Bloomberg is not new - according to insiders, Adnoc had already signaled a possible further increase in its informal offer to this level in August. Adnoc's interest in Covestro was first leaked in June. At that time, according to insiders, the oil giant initially made an informal offer of EUR 55 per Covestro share. In July, Adnoc then offered EUR 57 per share, but this was not met with approval either.

Covestro is the former plastics subsidiary of Bayer, which the Leverkusen-based company floated on the stock exchange in 2015. Covestro's approximately 7300 employees in Germany are protected from compulsory redundancies until the end of 2028. There are around 18,000 employees worldwide. A takeover of Covestro would give the oil company Adnoc, which also manufactures refinery products and petrochemicals, access to more advanced materials used in electric vehicles, thermal insulation for buildings, coatings, adhesives and engineering plastics. Under CEO Sultan al-Jaber, the company aims to move into new energies, low-carbon fuels such as ammonia and hydrogen, as well as liquefied natural gas and chemicals.

(Report by Patricia Weiß, edited by Sabine Wollrab. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)