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(Reuters) -Covestro’s supervisory board is meeting on Friday to discuss whether to hold formal negotiations with suitor Abu Dhabi National Oil Company (ADNOC) over the energy group’s takeover approach, a person familiar with the matter told Reuters.
The sign of change from Covestro’s previous stance comes after two top-15 investors of the plastics and chemicals maker told Reuters last month that it should engage in formal takeover talks in the interest of its shareholders.
Covestro and ADNOC declined to comment.
The German group’s shares were up 8.6% at 51.96 euros at 1445 GMT, their highest level in about 18 months.
The reported deal approach has been described by the CEO of larger rival BASF as a sign that the European chemical industry, which is suffering from cost inflation and a weak economy, needs support from lawmakers to become more competitive.
ADNOC, which is trying to diversify and develop its downstream and renewable energy operations, made a non-binding offer for Covestro of 55 euros per share in June, which was rejected, according to media reports.
In August, ADNOC indicated to Covestro, which has not commented on the takeover approach, that it could raise its informal offer to 60 euros conditional on the German company entering formal talks, Reuters reported at the time.
That non-binding offer would value Covestro, a maker of chemicals used in insulation, upholstery foams, coatings and transparent engineering plastics, at about 11.6 billion euros ($12.4 billion).
Recent business developments have not served to justify Covestro’s reticence. In August, it warned of no improvement in demand this year as customers continue to draw down existing inventory rather than order new chemicals.
Bloomberg News reported the news earlier on Friday.
($1 = 0.9329 euros)
