Wattyl, which has a market capitalisation of $107m, has accepted a $142 million takeover proposal from Valspar, the Sydney-based company announced today.

One of the world's largest paint and coatings companies listed on the New York Stock Exchange, Valspar has agreed to pay out $1.67 cash per share for all of Wattyl's shares on issue. This offer is well above the latter's closing price of $1.26 on Friday.

The deal would be implemented by a scheme of arrangement subject to conditions including the approval of Wattyl shareholder, Australia's Foreign Investment Review Board and New Zealand Overseas Investment Office.
Wattyl's board consensually advises shareholders to accept the proposal in the absence of a better offer. All Wattyl directors plan to vote their shares in favour of the acquisition, the company said.

Valspar's bid is more than double Wattyl's closing price of 78.5 cents on May 24, the day before Wattyl received an indicative and non-binding proposition from the US paint maker.

"The proposed acquisition enables shareholders to realise cash for their Wattyl shares at a significant premium to recent trading levels," said Wattyl chairman John Ingram in a statement.

"With global expertise and scale, Valspar will provide Wattyl's customers and employees with significant benefits."