FRANKFURT (dpa-AFX) - An aborted takeover has given new impetus to the recovery of Brenntag shares. The shares of the Essen-based chemicals trader soared by around six percent to 64.40 euros by midday on Tuesday, making it the clear best performer on the Dax. The German benchmark index recently rose by a good one percent.

Brenntag does not intend to buy US rival Univar Solutions after all, following public criticism from one of its shareholders. The Essen-based company had only confirmed at the end of November that it was interested in a takeover. The company had "decided not to continue these talks," it said in a one-sentence statement the previous evening.

Shareholder Primestone Capital had publicly opposed the plans a month after they became known. In his opinion, Brenntag should rather focus on improving its core business instead of a "risky" takeover. To this end, the investor also called for a split-up of the company.

This brought relief to the unsettled Brenntag investors. One trader said that the cancelled plans eliminated the risk of a capital increase and that the shares were also cheaper than those of industry rivals.

Against this background, analysts also viewed the abandonment of the takeover plans positively. According to expert Michael Schäfer from Oddo BHF, the risk-reward ratio of Brenntag shares is now attractive.

Expert Thomas Wissler of Alsterresearch conceded that a takeover would make sense purely from an industry logic perspective and would complement Brenntag's existing product portfolio and geographic reach well. A merger of the two companies would offer the opportunity to boost growth and reduce costs by leveraging synergies across all verticals. It would also significantly strengthen the negotiating position vis-à-vis large chemical companies. However, the latter could also mean that a potential acquisition could face stringent and lengthy antitrust scrutiny, as national governments are likely to scrutinize sectoral mergers more closely.

Analyst Rory McKenzie of major Swiss bank UBS added that key concerns about the deal included equity dilution and higher leverage. As the initial reaction to the potential takeover had been very negative at the end of November, the turnaround brings a buying opportunity, he said.

Brenntag's shares had come under above-average pressure following confirmation of preliminary takeover talks with Univar Solutions and slumped to a two-month low of just under 55 euros in mid-December. A recovery then began, which now accelerated significantly on Tuesday. However, the shares are still around 4 euros away from the price immediately before the announcement of the takeover plans.

Brenntag shares had already underperformed last year. In 2022, they were down by almost a quarter, while the Dax lost only twelve percent.

From a chart perspective, however, the picture brightened considerably with the jump in the share price on Tuesday. The shares broke above the 50-day average line below which they had fallen after the takeover plans became known. The curve is a measure of the medium-term trend. The next resistance zone is now the area between 65 and 66 euros. This is where some prominent lows of 2022 lie, and in addition the much observed 200-day average is currently moving in this region./la/bek/mis