German chemical giant BASF AG (BAS.XE) might present a binding offer for specialty chemical firm Cognis as early as in June, but negotiations with the company's owners are still tricky, people familiar with the matter told Dow Jones Newswires Friday.

The negotiations between BASF and Cognis owners Goldman Sachs Capital Partners and London-based private equity firm Permira are "difficult", as BASF is reviewing ways how to protect itself against certain risks arising from the takeover, several people said.

BASF, which is considered the likely buyer because of its financial strength, had so far only presented a non-binding offer, valuing Cognis at around EUR3 billion, one of the sources said. But there are still open issues such as antitrust concerns, uncertainties regarding future business development and risks associated to pension obligations.

"The discussions are about more than the usual finger-wrestling," said a person familiar with the process.

According to another person, pension obligations and tax losses carried forward aren't valued very "conservatively" in the Cognis balance sheet. Since BASF has a more conservative balance sheet approach, it could face a financial burden from readjusting.

A BASF spokeswoman declined to comment on the information.

 
  Websites: www.basf.com 
            www.cognis.de 
            www.lubrizol.com

-By Eyk Henning, Dow Jones Newswires; +49 69 29725 508; eyk.henning@dowjones.com

(William Launder in Frankfurt and Marietta Cauchi in London contributed to the

article.)
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