U.S. Markets closed

Innospec withdraws bid to buy TPC Group

LITTLETON, Colo. (AP) -- What had been shaping up as bidding war for the Houston chemical company TPC Group appeared to come to an end Monday, when Innospec withdrew its buyout offer.

Shares of TPC plunged 7 percent to $44.78 in midday trading.

Innospec made its offer after TPC had already accepted a bid of about $628 million from First Reserve Corp. and SK Capital Partners.

Innospec said that it walked away from the deal reluctantly, citing the best interests of its shareholders. The specialty chemicals company vowed to continue its pursuit of other opportunities, which it hopes will come to fruition in the coming months.

"We have spent a great deal of time and effort studying the TPC business, and, while we still feel that it is a good fit with Innospec, we are unable to conclude a deal structure in a manner where we are totally satisfied with the value creation for our shareholders," CEO Patrick Williams said.

Innospec had made a non-binding offer in mid-November to buy the company for $47.50 per share.

TPC on Monday urged shareholders to support a rival $45 per share offer by First Reserve Corp. and SK Capital Partners. The company is holding a special shareholder meeting to vote on the deal Wednesday.

Innospec also announced Monday that it is joining the growing ranks of companies declaring a special dividend to help investors avoid potentially higher taxes.

The $2 per share dividend will be paid on Dec. 21 to shareholders of record at the close of business on Dec. 14.

Since 2003 investors have paid a maximum 15 percent on dividend income. But that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending. As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.

Shares of Innospec Inc. rose 34 cents to $32.17. Its shares remain in the middle of its 52-week trading range of $25.18 to $34.87.