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Monday March 24

DuPont Offers C$1.4 bln for DuPont Canada Stock

DuPont Co. has offered to buy all the shares of its Canadian unit that it doesn't already own for C$1.4 billion ($950 million), a move that is part of the company's plan to split off its textiles and interiors unit.

The No. 2 U.S. chemicals maker, which currently owns 76 percent of DuPont Canada Inc., is bidding C$21 in cash for each class A common share not owned by DuPont or its affiliates.

The offer caused DuPont Canada shares to jump 25 percent in Toronto. The stock was up C$4.31 at C$21.55 on Wednesday at midday, while the shares of the parent company fell 76 cents in New York to $39.32.

The board of DuPont Canada, a specialty chemicals, fiber and film maker, has recommended that shareholders accept the offer. The DuPont Textiles & Interiors (DTI) unit accounts for a substantial portion of DuPont Canada's business.

TD Securities Inc. had estimated the shares were worth between C$20 and C$23 each. TD was hired last year by the Canadian unit's board as part of its analysis of DuPont Co.'s proposal to split off DTI.

Headquartered in Mississauga, Ontario, DuPont Canada traces its origins in the country back to 1877. The firm has manufacturing plants and sales offices in Ontario, Quebec and British Columbia. The acquisition last year of Liqui-Box, which makes food packaging systems, added sites in the United States, Britain and India.

DuPont Canada, which employs about 4,000 people, sells products to approximately 3,000 customers in Canada, the United States and 40 other countries.

A spokesman said the firm generated C$2.5 billion in revenue and earnings of C$247.5 million, or 88 Canadian cents a share, in 2002. Its nylon division, which will become part of DTI, accounted for 38 percent of sales, making it the largest of DuPont Canada's five business units.

If the share offer is unsuccessful, DuPont said it would transfer its entire stake in DuPont Canada to DTI.

DuPont said it plans to separate its textiles and interiors unit by the end of this year, if market conditions permit. The company hopes to launch an initial public offering of the unit, although it has not ruled out other options such as an outright sale or spinoff.

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