Home Products International Inc. Chief Executive Officer Jim Tennant now faces competition in his bid to buy the Chicago-based housewares injection molder.
On Sept. 23, a group that includes billionaire investor Sam Zell and Joe Gantz, a former Home Products director, submitted an offer to buy the company for $1.75 per share. Since the group already owns a stake in Home Products, its offer would total about $12.7 million.
The new offer is 25 cents per share higher than what Tennant had offered for the company earlier this year; his deal was worth about $11 million.
Tennant did not return a call seeking comment before deadline.
The new group includes Triyar Capital LLC of Los Angeles and current Home Products shareholder Equity Group Investments LLC of Chicago. Zell, who specializes in breathing life into dead businesses, heads Equity Group Investments. He was not available for comment.
Tennant had offered to buy the company in February, arguing that Home Products would be able to compete better as a private company. The firm is publicly traded.
``Very small public companies, really, we get no attention,'' he said at the time. Home Products agreed in principle to the deal in June.
But some shareholders were unhappy with Tennant's offer. Some have filed suit in the Court of Chancery in Newark, Del., and the Chancery division of the Cook County Circuit Court in Chicago. In those complaints, filers said that the $1.50 per-share price was inadequate and that the company's board had breached its fiduciary duties by entering the agreement.
During the firm's conference call reporting second-quarter results July 28, analysts also questioned whether the purchase price was adequate, given improvements in the first half of the year.
During the call, officials reported a loss of $600,000 for the second quarter, compared with a loss of $3.3 million for the same period in 2003. In addition, sales increased to $64.2 million, from $54 million for the same period in 2003.
HPI has four injection molding facilities, one each in Chicago; El Paso, Texas; Thomasville, Ga.; and Louisiana, Mo.