The Andersons says buyout proposals undervalue company

by World Grain Staff
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The Andersons
The Andersons said it received an initial private, unsolicited proposal from HC2 to acquire the company for $35 per share in cash on Jan. 29.
MAUMEE, OHIO, U.S. — The Andersons, Inc. announced on May 18 that its board of directors has rejected two non-binding, highly conditional, unsolicited proposals from HC2 Holdings, Inc. to acquire all outstanding shares of The Andersons.  The Andersons' announcement is in response to HC2's public disclosure of its offer on May 17.

On Jan.29, The Andersons received a private, unsolicited proposal from HC2 to acquire the company for $35 per share in cash. A subsequent proposal was submitted on March 22, for $37 per share in cash. The latest offer had a value of $1 billion, and was higher than the stock price close on May 17 of $25.94 per share.

Following The Andersons’ rejection of the takeover bids, its stock price increased 23.63% in trading on the New York Stock Exchange on May 18. The stock (ANDE) closed at $32.07 per share, up $6.13 from a close of $25.94 per share on May 17.

"We believe HC2's proposals ignore our value and prospects as a standalone entity and represent an opportunistic attempt to acquire the company at a low point in the industry cycle,” said Mike Anderson, chairman. “Following a thorough review, and in consultation with our independent financial and legal advisors, our board determined that the offers are not credible, significantly understate the company's true value and are not in the best interests of our shareholders. Our board and management team remain confident in our ability to execute on our standalone plan and believe we are well positioned to continue to create significant long-term value for shareholders." 

In a letter to Board Chairman Michael Anderson, HC2 made an alternative offer of $950 million for the Grain Group (excluding the investments in Lansing and Thompson’s) and the Rail Group. HC2 said it would provide stalking horse bids for each of the remaining assets including the Ethanol Group, Nutrient Group, Retail and the investments in Lansing and Thompson’s.

The Andersons also noted that HC2's letter dated May 17 contained numerous inaccuracies and misleading statements. Among others, HC2's claim that The Andersons did not substantively respond to its $37 per share offer is patently false. 

“An acquisition of The Andersons is consistent with our strategy of pursuing cash flow positive businesses that enhance the overall shareholder value for the company,” said Philip Falcone, HC2’s chairman, president and chief executive officer. “We are confident in our ability to complete the transaction given that there are no financing conditions and our exclusive understanding with a qualified strategic partner that is aligned with us to complete this transaction.”

Deutsche Bank is acting as financial advisor and Kirkland & Ellis is acting as legal advisor to The Andersons.
 
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