(Bloomberg) -- Kingspan Group Plc and Standard Industries Inc., two of the final suitors for Bridgestone Corp.'s Firestone Building Products unit, have dropped out of the bidding, people with knowledge of the matter said.
The companies decided against submitting offers by Monday's deadline, the people said, asking not to be identified because the information is private. Firestone Building Products was expected to fetch more than $2.5 billion, Bloomberg News reported previously.
Kingspan, a serial dealmaker, has walked away from potential takeovers before when it thought assets were overpriced. This time around, management is grappling with the fallout from the 2017 fire at London's Grenfell Tower, which used Kingspan's insulation products. Shares of the acquisitive Irish company have fallen about 25% since early November.
Last week, Kingspan apologized for “shortcomings” uncovered by an inquiry into the blaze and said a key executive will soon retire. The reason for Kingspan pulling out of the bidding process for Firestone Building Products, which would have been its largest-ever deal, couldn't immediately be learned.
“Kingspan is a disciplined buyer that continues to seek exposure to energy conservation opportunities that complement our existing focus within the building envelope,” a spokesperson said in a statement, declining to comment on specific deals.
Price Discipline
The Bridgestone unit, part of the Japanese industrial conglomerate's North American division, makes roofing systems for commercial markets. The sale also previously attracted interest from Carlisle Cos., people with knowledge of the matter have said.
Shares of Kingspan were down 0.2% to 61.70 euros at 3:40 p.m. Tuesday in Dublin, giving the company a market value of about 11.2 billion euros ($13.7 billion).
No final decisions have been made, and the suitors could opt to return to the negotiating table or another buyer could emerge, the people said. A representative for Standard Industries also declined to comment.
A spokesperson for Bridgestone said the firm is exploring opportunities to unlock value for employees, customers and shareholders and to support Firestone Building Products's long-term growth plan.
As the Firestone auction was underway, an investment vehicle linked to Standard Industries called 40 North made a $4 billion takeover offer for U.S. chemical producer W.R. Grace & Co. The company has so far rejected the offer, escalating tensions with the top shareholder.
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