NEW YORK — Dainippon Ink & Chemicals of Japan says it is ready to increase its cash offer for Sun Chemical Corp. to $663 million if negotiations begin promptly, Sun announced Monday.
Sun Chemical's chairman, Norman E. Alexander, who owns nearly half of the company's stock, said the higher bid of $85 a share was still unacceptable. In addition, Sun Chemical said it had filed suit to block Dainippon from making any substantial purchase of Sun's shares.
Sun Chemical's stock rose $3.75 to close at $65.75 a share Monday on the New York Stock Exchange.
Dainippon had offered $77 a share, or $600.6 million, on April 22 to buy Sun Chemical. At that time, it also offered to buy instead Sun Chemical's graphic arts materials group for $425 million.
Sun Chemical, a leading maker of graphic equipment, printing inks, speciality chemicals and automotive and aircraft parts, had revenue of $883.9 million in 1985. The graphic arts materials group accounted for about 63% of its total revenue.
Owns 44.6% of Stock
The Japanese company is still offering to buy all of Sun Chemical's 7.8 million common shares outstanding, Sun's announcement said.
Alexander, who owns about 44.6% of Sun Chemical's outstanding stock, said in a statement: "This revised proposal is unacceptable to me personally."
Sun Chemical said it had filed suit in federal court in Manhattan seeking to block Dainippon from acquiring a significant interest in Sun Chemical. The company said such an acquisition would result in serious and irreparable injury to Sun Chemical's defense-related businesses and to its interest in other defense-related and marine transport businesses.
Sun also contended that Dainippon's threat to acquire a substantial amount of Sun Chemical's stock was a tactic to force Sun Chemical to sell its graphic arts materials group to Dainippon at less than its true value.
DIC Americas, a subsidiary of Dainippon, had no comment on the lawsuit.
On April 21, the day before making its $77-a-share offer, Dainippon had proposed paying $75 cash per share for Sun Chemical, or $425 million for the graphic arts materials group, but the proposal was not regarded as a firm offer, Linda Kyriakou, a Sun Chemical spokeswoman, said at that time.
Also on April 21, before the initial buyout offer from Dainippon was announced, Alexander purchased about 11.4% of Sun Chemical's outstanding stock, bringing his stake to the current 44.6%.