US grain handler Andersons rejects HC2's $1.04-bn unsolicited takeover bid
19 May 2016
US grain handler Andersons Inc yesterday rejected a $1.04-billion unsolicited takeover bid from HC2 Holdings Inc saying that the offer was too low and an attempt to capitalise on a sharp downturn in the agricultural economy.
HC2 Holdings Inc, the investment company run by former hedge fund manager Philip Falcone, had tabled an unsolicited $37 a share buyout offer yesterday, amounting to a 43-per cent premium over Andersons' 17 May closing price. (See: HC2 Holdings tables unsolicited $1.04 bn cash buyout bid for US grain handler Andersons)
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.
In a letter to Andersons chairman Michael Anderson, 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.''
Mike Anderson denied HC2's claim that it had not substantively responded to the offer. According to him, in January, HC2 had offered to pay $35 per share.
"The offers are not credible, significantly understate the company's true value and are not in the best interests of our shareholders,'' he said.
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, and its stock price has fallen by nearly 45 percent over the past two years.
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.