HC2 Holdings tables unsolicited $1.04-bn cash bid for US grain handler Andersons
18 May 2016
HC2 Holdings Inc, the investment company run by former hedge fund manager Philip Falcone, yesterday tabled a unsolicited $1.04 billion cash bid to buy US grain handler Andersons Inc.
In a letter to Andersons chairman Michael Anderson, HC2 Holdings offered to pay $37 a share, a 43 per cent premium over Anderson's closing price yesterday.
In his letter, Falcone said that HC2 has since January repeatedly expressed its interest in Andersons to enter into a negotiated transaction, but the company had rejected its offer as too low.
Falcone stated that at a meeting on 18 April it has ''only stated that the price was too low without providing any indication of an acceptable price or justification for a higher price.''
''Unfortunately, you have left us no choice but to make your shareholders aware of our proposals,'' the letter added.
"We believe the company has been poorly managed and has not been effective in extracting synergies of any significance from the five disparate corporate entities it owns, controls and operates," Falcone said. "We believe action is necessary to maximize value from these assets."
HC2, which holds a minority stake in Andersons, said it is also willing to acquire the company's grain and rail businesses for $950 million and HC2 would provide so-called stalking horse bids for each of the remaining assets in a sale process.
Ohio-based Andersons is an independent grain trader operating in North America, a region where it competes with major players like Cargill Inc., Archer-Daniels-Midland Co. and Bunge Ltd.
It has posted three straight quarterly losses, and recently sold off its under-performing grain and plant nutrient assets in Iowa.
In its most recent quarter, Andersons posted loss of $14.7 million, down from a year-earlier profit of $4.1 million.
Founded in 1947, Andersons is a diversified company rooted in agriculture conducting business across North America in the grain, ethanol, plant nutrient and rail sectors.