Shares in specialty chemicals maker Elementis (ELM) surged 12% to 139p at the end of January following a press report it had received a bid from a US private equity fund.

The shares eventually hit a new 12-month high of 142.4p after it was revealed New York based firm KPS Capital Partners had submitted an offer of 160p per share in December.

However, the Elementis board rejected the offer as it was holding out for 180p according to newswire Reuters, causing KPS to walk away.

This isn’t the first time the group has received offers: in 2020, it was approached by US company Mineral Technologies, and in 2021 by Innospec (IOSP:NASDAQ), one of its industry peers.

Over the past few months there has been considerable pressure on the Elementis board from major shareholders disappointed with the firm’s performance, and 9.8% stakeholder Franklin Mutual Advisers urged the firm just last month to find a buyer, so the news that it had a bid and rejected it is not likely to sit well.

On a positive note, fourth-quarter trading was ahead of expectations and analysts at Jefferies have recently flagged upside potential in the firm’s operating profit margin. 

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