SYDNEY, Australia (AP) — Australian fertilizer maker Incitec Pivot Ltd. said Wednesday it has taken a 13 percent ''strategic'' stake in explosives manufacturer Dyno Nobel Ltd., in a move that could be a precursor to a takeover bid worth as much as 2 billion Australian dollars (US$1.6 billion; euro1.2 billion).
In a statement, Incitec said it will seek talks with Dyno Nobel's board and management to ''further opportunities'' after taking the stake.
''It is not known what the outcomes of those discussions may be,'' the company said, without saying whether it will launch a full bid for Dyno. ''Incitec Pivot will update the market as matters may develop,'' it said.
Dyno Nobel's share have jump more than 17 percent on speculation that the stake holding may lead to a bid.
Mid-afternoon, Dyno Nobel's share were at A$2.40, up 17.1 percent from Tuesday, giving it a market capitalization of approximately A$2 billion.
Incitec shares, meanwhile, fell 4.7 percent by mid-afternoon to A$65.80.
Dyno Nobel — the world's second-largest explosives maker — listed in April 2006 after being sold to investors at an offer price of A$2.37 by Macquarie Bank Ltd. and others.
Incitec Pivot, which is predominantly a fertilizer group, may want to buy Dyno Nobel to consolidate the ammonium nitrate sector and tap into booming demand for explosives from the mining sector.
Incitec Pivot said it bought the stake in on-market and off-market transactions between Aug. 24 and Aug. 29 at an average price of A$2.35 a share.
Last week, Dyno Nobel said its net profit for the first half ended June 30 fell 1.5 percent from a year ago to US$43.4 million (euro31.8 million).