Automotive supplier Ventra Group Inc. is in negotiations for a cash buyout of its company now that an all-stock offering from a competing bidder appears to have fallen by the wayside.
The Oakville, Ontario-based molder of bumper fascias and other exterior components announced June 16 it has entered discussions with a prospective buyer ``that has indicated in writing that it is prepared to make an all-cash bid for the outstanding common shares of Ventra.''
It has not identified the bidder, but company watchers are speculating it is Ventra's biggest stockholder, bumper maker Flex-N-Gate Corp.
``Nothing that is said is real until you see it announced,'' noted analyst Rich Morrow with the Canadian Imperial Bank of Commerce in Mississauga, Ontario.
Officials from both Ventra and Flex-N-Gate were not available to comment.
Ventra put itself on the block in March, reeling from low stock prices and a fiscal year that left it with a loss of C$68 million (US$43.2 million) on sales of C$860.7 million (US$547.5 million). Its stock price dropped to a low of C$0.25 (US$0.16) late last year but has rebounded above C$1 (US$0.65) since the company offered to sell all or part of itself.
Its stock was selling June 22 for C$1.46 (US$0.95).
Flex-N-Gate was one of the early bidders for Ventra, launching discussions for a potential purchase of at least part of the firm in March through its subsidiary, 3051932 Nova Scotia Co. of Windsor, Ontario. Flex-N-Gate is a metal bumper specialist based in Urbana, Ill., and owned by Chief Executive Officer Shahid R. Khan.
Flex-N-Gate does not release any sales figures, but has about 3,500 employees with facilities in Illinois, Michigan and Ontario. It has worked with Ventra in the past, providing metal beams for plastic bumper fascia systems. The company owns nearly 20 percent of Ventra's shares, which are traded on the Toronto stock exchange.
Any offer still must go through proper channels with Ventra's board of directors and securities officials before any deal could take place, Morrow noted.
Meanwhile, provincial securities officials have advised Calgary, Alberta-based Proprietary Industries Inc. to halt its unsolicited bid to buy out Ventra in an all-stock deal and recommended it not extend or vary its offer.
Proprietary, an investment company with extensive holdings in the oil and energy industries, had offered to buy at least a controlling interest in the molding business and potentially up to 100 percent of the shares, bidding 0.44 of one of its shares for a Ventra share.
Proprietary officials stated in a June 19 release they had not received a written order yet from the government, and still planned to send an amended offer to shareholders unless they received one.
``It's a little bit of a tug-of-war going on,'' Morrow said. ``We're just going to have to stay tuned.''