HENKEL WANTS MORE FROM P&G FOR WELLA STAKE

German Company Unhappy With Stock Price Offered

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CINCINNATI (AdAge.com) -- Procter & Gamble Co. rival Henkel, jilted in its own bid for German hair-care marketer Wella last year, wants more for its nearly 7% stake in Wella than P&G is offering.

Henkel CEO Ulrich Lehner said in a speech to a meeting of his company's shareholders today that P&G should increase its offer for preference shares, which are similar to preferred shares in the U.S., so that the offer is similar to the one for ordinary or common shares.

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control of Wella, whose major shareholders agreed to sell their stake to P&G last month and whose management blessed the $7 billion deal last week. But under German law, Henkel could indefinitely prevent P&G from delisting Wella as a public company. That would require P&G to disclose financial details of Wella's operations separately even after closing the deal.

P&G has offered Wella's minority shareholders about $99 a share for ordinary shares and about $66 a share for preference shares. Mr. Lehner said the price for non-voting preference shares should be closer to that of ordinary.

Some analysts speculate Henkel may want to buy Wella's retail hair-care or fragrance business or some other piece of P&G's beauty-care business as its price for surrendering the shares.

A Henkel spokesman could not be reached for comment.

A P&G spokesman called the offer for Wella's preference shares "fair and attractive." While the offer is only an 8% premium to the average share price during the three months before the deal was announced, it's 50% above what shares traded at in October, before speculation about a possible deal began to build.

The spokesman said he was not aware of any talks to date between P&G and Henkel concerning the Wella stake, adding that he couldn't speculate on whether a transaction between the companies could take the form of brands or businesses rather than cash.

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