(Reuters) - Versum Materials Inc on Friday urged its shareholders to reject a hostile bid from Merck KGaA, but said it would engage with the German pharma group to determine if the offer is superior to its agreed merger with rival Entegris.
Merck KGaA had on Tuesday launched a $5.9 billion all-cash takeover offer for Versum, the former speciality chemicals division of industrial gases group Air Products (NYSE:APD), to boost its presence in the semiconductor materials market and sideline a rival bidder.
Versum has been opposed to Merck's bid since it was first proposed last month, saying it was committed to an all-share merger with U.S. rival Entegris agreed in January.
Versum said on Friday it has been granted a waiver by Entegris that allows it to engage with, but not provide non-public information to Merck.
Merck could improve terms of the offer, Versum said, adding that it has not changed its recommendation to back its merger with Entegris.
The move is also the first major hostile takeover bid by a German company for a U.S. target since BASF's 2006 approach for catalytic converter maker Engelhard, which ended up becoming an agreed deal.