Apollo Global Management (NYSE:APO) is exploring the feasibility of making an offer for Chemours (NYSE:CC), the former DuPont (NYSE:DD) chemical manufacturing unit, and using it as a platform for consolidating other titanium dioxide makers, Bloomberg reports.
APO is said to have held preliminary talks with bankers about a buyout of Chemours and then approaching other companies, including Tronox (NYSE:TROX), about a tie-up to generate scale and cost efficiencies.
Among potential obstacles to a deal are a tax bill for DuPont if Chemours is taken private too soon after the July spinoff, and the ~$4B in debt resulting from a payment made to DuPont prior to the split.
While OCI Resources (NYSE:OCIR) is not likely to attract interest from the three largest strategic players in the market, the soda ash producer could be an attractive purchase for chemical-focused P-E firms or an indirect strategic player, according to TheDeal.
OCI Enterprises, which owns a 75% stake in OCIR, said earlier this week it is evaluating strategic alternatives for its entire stake in the MLP.
Analysts say none of the three largest players in the space - Tronox (NYSE:TROX), Belgium's Solvay (OTC:SVYSF) and India's Tata Chemicals - are considered a suitable bidder for OCIR, but various P-E firms and chemical companies could take a long look.
OCIR could fetch 9x-9.3x EBITDA, which works out to a range of $1.15B-$1.19B, the report says.