Gatemore Capital Management has published a second open letter to John O’Higgins, chairman of the board at UK-based speciality chemicals company Elementis. This follows its first such letter on 29 April and the company’s official response.

Graham Meller of Buttonwood Marketing shares some results from a recent trial of continuous metals monitoring technology

Elementis has announced some promising results from a trial of a new continuous metals monitoring technology at a river by its talc plant at Sotkamo in central Finland. The technology employs micro-discharge optical emission spectroscopy (µDOES*) from Finnish university spin-off Sensmet.

Gatemore Capital Management has published an open letter to John O’Higgins, chairman of the board at UK-based speciality chemicals company Elementis, stating that there is “an urgent need for change”. This echoes a letter from another ‘activist’ shareholder in late 2023.

Elementis mainly supplies the personal care sector, notably cosmetic and antiperspirant actives – it is the world market leader in the latter field. 85% of its products are of natural origin. Coatings and paper are other key markets.

Speciality chemicals company Elementis has come under pressure after an investor, Franklin Mutual Advisers, published an open letter to board chairman John O’Higgins, calling for it to put itself up for sale before its Q3 results on 31 October. Elementis has responded by saying it did not think this to be in shareholders’ best interests.

Following press speculation, it has been confirmed that Innospec made an offer to acquire Elementis for £1.60/share on 31 March and that this was rejected on 9 April. Innospec is no longer pursuing the matter.

Elementis said that its board, together with its management and advisers, assessed the offer against its own valuation framework concluded that it “fell meaningfully short of the value creation potential” of the current strategy, particularly in view of “the strong momentum in the business” after a strong start to the year. They therefore unanimously rejected it.

Two players in speciality chemicals, Elementis in the UK and W.R. Grace in the US, have both been approached with conditional takeover offers and have both rejected them in recent weeks.

Elementis announced on 12 November that it had received a preliminary conditional proposal from Minerals Technologies in relation to a possible cash offer at £1.07/share. Based on consultation with its financial adviser, it concluded that this “significantly undervalued Elementis and its future prospects” and the board unanimously rejected it.