A shareholder group may hire an independent expert to evaluate the recently announced proposal for a management buyout of Nortek Inc.
Rye, N.Y.-based Gabelli Asset Management Inc., led by Mario Gabelli, outlined its intent in an April 16 filing with the Securities and Exchange Commission and in an April 18 conference call. Gabelli disclosed it has increased its stake in the Providence, R.I.-based building products manufacturer to 15.6 percent.
Nortek received a formal proposal April 13 from New York-based equity firm Kelso & Co. LP, which offered shareholders $40 per share to acquire Nortek by teaming with members of current management. Total value of the deal would be $1.4 billion, including assumption of $990 million in debt.
But during Nortek's April 18 conference call announcing first-quarter results, Gabelli suggested other options to increase shareholder value, including selling off Nortek's vinyl siding businesses. Nortek owns Napco Inc. of Valencia, Pa., and Variform Inc. in Kearney, Mo.
Gabelli said the company has ``plenty of room for plenty of opportunities'' because of its improving earnings. Nortek reported first-quarter profit of $49 million, up 30 percent from the same period a year ago.
Nortek's board has retained New York-based Morgan Stanley Dean Witter & Co. as a financial adviser.