Morgan Stanley Discusses Dupont, Danisco Deal (DD)

Morgan Stanley is out with a research report on Dupont DD, as the company raised its bid for Danisco. It has an Equal Weight rating on Dupont. In a note to investors, Morgan Stanley writes, "On Friday, DuPont raised its offer for Danisco by 5% to DKr 700/ share (from DKr 665 previously). As we highlighted in our recent report, Higher Price for Danisco Likely Needed but Deal Still Makes Sense, Mann et al, Feb 9, 2011, local press (Borsen) had reported that many Danish investors believed DuPont's $6.3bn offer for Danisco undervalued the company and were not willing to tender their shares. Our forecasts already assume DuPont is required to DKr 700/ share and we still believe the acquisition is highly accretive. We also suggested in the report that if DuPont believes in the Genencor biotechnology pipeline, it could pay up to DKr 760 / share (14% premium to initial offer) and still generate value for DuPont shareholders. In our view, the Danisco acquisition is strategically sensible, given DuPont's desire to grow its exposure to Agriculture and Nutrition. Please see our previous report for a full analysis of DuPont's proposed acquisition of Danisco." Shares of DD are down 7 cents in early Monday trading to $56.72, a loss of 0.1%.