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

Asia to remain chemical giant but US shale will bring competition

July 23, 2014 1:00 pm ET

A new IHS Chemical report on global spending for chemical production predicts capacity additions will peak in 2014 at $120 billion and then will...    More

Image

DuPont quarterly sales drop, income rises

July 23, 2014 12:46 pm ET

DuPont Co.'s sales and net income experienced slight changes for the second quarter 2014, as operating earnings dropped to $1.17 per share in the...    More

Image

Celanese to expand production in Brazil

July 23, 2014 11:15 am ET

Celanese Corp., the Irving, Texas-based chemicals and specialty materials company, has announced that it will expand its manufacturing capabilities...    More

Image

Contigo, Avex buy lets Newell Rubbermaid leapfrog new bottle development

July 22, 2014 4:11 pm ET

Newell Rubbermaid Inc. is ready to accelerate its move into the reusable water bottle business with the purchase of two on-the-go drinkware brands.    More

Image

DSM planning North American nylon plant

July 22, 2014 11:41 am ET

Materials firm Royal DSM NV plans to build a new nylon resin plant in North America, but no decision has been made on the plant's exact location.    More

Market Reports

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Plastics Recycling Market Review & Outlook 2014

This special report from Plastics News examines the North American plastics recycling industry and provides insight into indicators that impact market viability, including Resin pricing trends for virgin and recycled market material and historical Resin production trends for post- consumer and industrial waste.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events