India's Reliance raises offer to buy Lyondell: report

MUMBAI, Jan 8, 2010 (AFP) - India's Reliance Industries has sweetened its bid for bankrupt Netherlands-based chemicals maker LyondellBasell, but is still unlikely to succeed with the current offer, a report said on Friday.

The Wall Street Journal reported Reliance, India's biggest group, had raised its valuation of Lyondell to about 13.5 billion dollars from the 12 billion dollars initially put forward in November.

Lyondell's board had rejected Reliance's improved offer, the WSJ said, citing a person close to Reliance who acknowledged Lyondell was unlikely to agree to the new proposal.

Under a Lyondell reorganisation plan, the company would be handed to senior lenders in exchange for 18 billion dollars in debt. Investors would then support a 2.8 billion dollar stock sale by the company, the WSJ said.

Lyondell's current restructuring plan values the group as high as 15.5 billion dollars, the report said.

A Reliance spokesperson, when contacted by AFP, declined to comment on the report.

A deal between Reliance and Lyondell, the world's third-largest chemicals maker, would create a global energy and chemicals giant, with annual revenues estimated at near 80 billion dollars.

Reliance awaits the outcome of a crucial meeting next Tuesday in the US, where Lyondell's reorganisation proposal will be considered at the United States' Bankruptcy Court.

This week, Reliance said it raised nearly 574 million dollars through a share sale, which was seen by analysts as strengthening its war chest for global acquisitions.

Reliance shares hit an intraday high of 1,115 rupees on Friday on the Mumbai stock exchange before retracing on profit-taking to 1,102.65 rupees, down 0.23 percent or 2.55 rupees.

Source: AFP

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