FRANKFURT, June 22 (Reuters) - German plastics and chemicals maker Covestro AG has rejected an initial takeover proposal from Abu Dhabi National Oil Co (ADNOC) saying the offer was too low, Bloomberg News reported on Thursday citing people familiar with the matter.
The stock jumped as much as 3.7% after the report was published, after trading down earlier in the day. It was up 2.4% at 1530 GMT.
Two people familiar with the matter told Reuters on Tuesday that ADNOC had approached Covestro with a takeover proposal worth more than 10 billion euros ($11.00 billion). Covestro and ADNOC declined to comment on Thursday's report.
"Covestro is a very well positioned, cyclical company that is currently cheaply valued. It would probably only be a matter of price whether the existing shareholders would accept such a takeover offer," Arne Rautenberg, fund manager at Union Investment, told Reuters.
Covestro, a maker of transparent polycarbonate plastics, as well as chemicals for insulation and upholstery foams, in April issued earnings guidance that reassured markets about its growth prospects. It also resumed a share buyback programme.
However, the supply and demand for polyurethanes is deteriorating, an industry investor said, adding that Covestro could well accept a higher offer between 60-65 euros per share.
($1 = 0.9088 euros)
Reporting by Emma-Victoria Farr in Frankfurt, Gursimran Kaur in Bengaluru; Editing by Jason Neely and Conor Humphries
Source: Reuters