Industrial thermoformer Alltrista Corp. has been given a small window of time to respond to a new bid from a New York investment firm.
Indianapolis-based Alltrista has until May 2 to accept the all-cash offer from Marlin Partners II LP, Marlin managing partner Martin Franklin said in an April 26 telephone interview. If the company continues to remain mum, the offer could be rescinded, Franklin said.
"In terms of due discussions, it's the end of the road for us," said Franklin, whose firm made a higher offer last year that Alltrista did not accept. "It's our final offer, and we don't anticipate another one."
The investment company, based in Rye, N.Y., made a fresh bid April 16 to purchase Alltrista for $17 a share, according to an April 23 Securities and Exchange Commission filing. If Alltrista decides to negotiate exclusively with Marlin on the sale, the offer price would climb to $18 a share.
Alltrista's stock, listed on the New York Stock Exchange, was trading April 25 at $14.84 a share. The price rose close to 20 percent April 23 when news broke of the latest Marlin offer.
Marlin's asking price for Alltrista is about $108 million, based on 6.354 million shares outstanding and a price of $17 a share. Banc of America Securities LLC is underwriting the offer.
Alltrista officials said in an April 23 statement they were evaluating the proposal and those from other, undisclosed parties. It added that there was no assurance that it would accept any proposal.
"We're looking at every possibility of maximizing shareholder value," said spokeswoman Kristin Clauss. "We can't say anything more about the status of any offer for fear of jeopardizing the process."
The company is under heat from several large shareholders to sell the company or at least make a management change.
The company reported a first-quarter loss of $238,000 on sales of $69 million. A company release said the first quarter typically accounts for a minor part of the year's total results. But in 2000, Alltrista recorded significantly lower sales and profit than in 1999. Sales were down 1.4 percent to $348 million, while profit was off 83 percent to $4.9 million.
Its plastic products segment — including thermoforming and injection molded products — has been particularly hard hit. Sales for that unit dropped 22.4 percent in 2000 from the prior year.
"Plastics has taken its lumps," Franklin said. "But we really don't see this as a turnaround situation. The metals side of the business has been healthier."
Marlin, which has investments in more than 100 companies, bid $30 a share for Alltrista in March 2000. Alltrista did not respond, instead announcing in May 2000 that it would retain Bear Stearns & Co. Inc. to pursue alternative paths.
Meanwhile, Marlin kept pushing for shareholders to vote on its proposal to take the company private. The firm finally joined Bear Stearns in reviewing options and rescinded its offer.
"It's been an excruciatingly long process," Franklin said. "We don't think shareholders of the company would be disappointed by our offer or our representation on the board."
Marlin, which owns 9.8 percent of Alltrista's common stock, is vying to add Franklin and another partner to Alltrista's seven-person board of directors. The proposal is on the agenda at Alltrista's June 1 annual meeting.
Another large shareholder, New York-based Steel Partners II LP, expressed anger that Alltrista management had not considered Marlin's previous, higher bid. In a letter to Alltrista management, disclosed in an April 24 SEC filing, the firm asked that Alltrista enter serious discussions with Marlin and any other viable purchaser.
The firm also asked that Alltrista Chief Executive Officer Thomas Clark immediately resign.
"We are thoroughly irritated by this process, which has been painfully drawn out since the engagement of Bear Stearns," said the letter, signed by Steel Partners Chief Executive Officer Warren Lichtenstein. "Because of management's unimpressive track record under the direction of Thomas B. Clark ... we have concluded that the company will not prosper under his current leadership."
Steel Partners owns 9.9 percent of Alltrista shares, making it potentially Alltrista's second-largest shareholder, according to the filing. Lichtenstein did not return a telephone call seeking comment before deadline.
Alltrista has a standard poison-pill defense in its bylaws to guard against a hostile takeover, limiting those outside Alltrista to no more than a 10 percent ownership stake. Franklin said his firm would like that revoked or amended.
In February, Alltrista realigned its thermoforming business under a single management team. The company owns thermoformers Triangle Plastics Inc. and TriEnda Corp., among other holdings.
The company is moving its design and engineering operations to several plants to put that work closer to manufacturing, Clauss said. The move will include hiring employees and closing a design and engineering center in Independence, Iowa. The center employs about 30.
Alltrista also plans to expand thermoforming operations in Winthrop, Iowa, this year, Clauss said.
The firm was ninth in North American thermoforming sales for 2000, with $128.8 million, according to a Plastics News ranking.