Despite earlier rejections from its target and losses on several legal fronts, vinyl flooring giant Armstrong World Industries Inc. has raised the ante in its bid to buy Domco Inc. of Farnham, Quebec.
Lancaster, Pa.-based Armstrong announced Dec. 5 in a news release that it was extending its offer to buy its Canadian competitor until Dec. 31 and upping the bid to C$26.50 (US$18.63) per share. That would put the price for all Domco shares at C$567 million (US$398 million), up from an initial C$23-per-share offer totaling C$492 million (US$346 million). Armstrong also is offering to assume $C44 million (US$31 million) of Domco's debt.
Prior to Armstrong's first overture in June, Domco shares had traded near C$14.50 (US$10.50 at the time) on the Montreal and Toronto stock exchanges.
But Domco officials continue to reject Armstrong's propositions.
``The amended Armstrong offer is still subject to an unachievable condition ... and as such remains ineffective,'' Domco directors wrote in a Dec. 9 circular to shareholders.
Domco's majority shareholder, Sommer Allibert SA of Nanterre, France, has steadfastly refused to sell its 69 percent stake to Armstrong. Armstrong has pegged its offer on the ability to acquire 51 percent of Domco's shares.
But the French auto and wall coverings major has made other plans. As of Dec. 3, Domco is under the control of Tarkett Sommer AG of Frankenthal, Germany. Tarkett Sommer was formed by the sale of Sommer's flooring businesses, including its stake in Domco, to Tarkett AG of Frankenthal. Sommer Allibert in turn acquired a controlling interest in Tarkett Sommer.