A. Schulman urges Ferro to reconsider takeover offer

By Frank Esposito
Senior Staff Reporter

Published: April 22, 2013 2:34 pm ET
Updated: April 23, 2013 2:14 pm ET

Related to this story

Topics Materials Mergers & Acquisitions Materials Suppliers
Companies & Associations A. Schulman Inc. Ferro Corp.

FAIRLAWN, OHIO — The battle of words continues in A. Schulman Inc.'s bid to acquire Ferro Corp.

Ferro's board of directors released a letter to its shareholders on April 18, urging them to vote for three board-approved candidates at the firm's May 15 annual meeting — and not for candidates recommended by shareholders FrontFour Capital Group and Quinpario Partners LLC.

FrontFour and Quinpario had released their own letter to Ferro shareholders on that same date, criticizing Ferro management and asking shareholders to "fully explore strategic alternatives, including engaging with A. Schulman."

Fairlawn-based Schulman — a leading global compounder — had made a March 4 offer to acquire Mayfield Heights, Ohio-based Ferro for $6.50 per share in a deal with a total value of $855 million.

But in the April 18 letter, the Ferro board — in an all-caps message — said: "Don't be misled into disrupting the momentum of our strategy or accepting a low-ball acquisition proposal."

The board added in the letter that FrontFour/Quinpario "has offered no specific plan of action or productive suggestions regarding Ferro's strategy." Stamford, Conn.-based FrontFour and St. Louis-based Quinpario combined hold about 4 percent of Ferro stock.

Schulman added to the mix on April 23 with a news release in which officials said that their firm's offer for Ferro "is not a 'low-ball' offer."

"We have been and continue to be disappointed by the Ferro board's refusal to talk, evidently driven by their stated desire to 'stay independent,'" said Schulman Chairman, President and CEO Joseph Gingo.

Schulman officials repeated their $6.50 per-share offer, saying it was at least 21 percent above Ferro's 30, 60, 90 and 180-day volume-weighted average prices before March 4. Ferro's per-share stock price was at $5.20 on March 1 before jumping as a result of the Schulman bid. It was at $6.80 in late trading April 22. The price had bottomed out near $2.50 in late 2012.

Ferro responded late on April 22 with statement saying that its board "carefully considered A. Schulman's unsolicited proposal and unanimously determined that it was inadequate and not in the best interests of Ferro shareholders." The company added that Ferro's board and management team "believe that the continued execution of the company's value creation strategy will deliver greater value to Ferro shareholders."

Ferro generates about 30 percent of its annual sales from plastic-related businesses, including polypropylene compounding. Schulman posted sales of just over $2.1 billion in its 2012 fiscal year, which ended Aug. 31. A combined Schulman-Ferro would have annual sales of almost $4 billion and would employ more than 8,000 worldwide.


Comments

A. Schulman urges Ferro to reconsider takeover offer

By Frank Esposito
Senior Staff Reporter

Published: April 22, 2013 2:34 pm ET
Updated: April 23, 2013 2:14 pm ET

Post Your Comments


Back to story


More stories

Image

PolyOne launches Geon BIO PVC using soy-based materials

April 24, 2015 11:48 am ET

More than a decade of research is paying off for Battelle Memorial Institute in the form of Geon BIO PVC compounds from PolyOne Corp.    More

Image

Study suggests infants at lower risk from BPA exposure than expected

April 23, 2015 4:58 pm ET

A new study shows that newborn babies may have less risk from bisphenol A exposure than originally thought.    More

Image

Braskem and Odebrecht reconsidering West Virginia plastics project

April 23, 2015 2:54 pm ET

Brazilian firms Braskem and Odebrecht have confirmed that they are re-evaluating Project Ascent, the major plastics and petrochemicals project they...    More

Image

DuPont center in India gets LEED Certification

April 23, 2015 1:07 pm ET

DuPont Co.'s Knowledge Center in Hyderabad, India, was awarded LEED certification by the U.S. Green Building Council.    More

Image

SiVance opens new R&D lab

April 23, 2015 12:07 pm ET

Milliken & Co. unit SiVance LLC has opened a new research and development lab for silicone and silane technologies in Gainesville, Fla.    More

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 15, 2015 - September 17, 2015Plastics Caps & Closures - September 2015

More Events