PQG - Grace says 40 North buyout bid inadequate but analysts foresee more offers

W.R. Grace & Co. (GRA) closed +27% in today's trade after receiving an opportunistic $4B takeover offer from top shareholder 40 North Management after shares had plunged 63% YTD.Late today, the company's board said it believed 40 North's $60/share proposal significantly undervalues the company and is not a basis for further discussions.Meanwhile, the buyout bid appears low and could be a tactic to draw a competing bid, Robert W. Baird analyst Ben Kallo wrote earlier.40 North's $60/share bid is 9.6x Baird's estimate for "normalized" adjusted EBITDA, Kallo says, seeing a more plausible offer of at least 12x EBITDA.According to Bloomberg, CL King analyst David Silver considers the potential for a deal between Grace and PQ Group Holdings (PQG), which he says trades at a significant discount to Grace, possibly helpful in a stock-for-stock merger of equals or other tax-efficient deal.

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Grace says 40 North buyout bid inadequate but analysts foresee more offers