Brazilian machine tool maker Industrias Romi S.A. has submitted an all-cash offer to the board of directors of Hardinge Inc to acquire all of the outstanding shares of Hardinge Inc, which has been rebuffed by hardinge Inc. (UPDATED: 6 February)
 In a statement of 4 February, Romi says: "Hardinge Inc has refused to enter into any meaningful dialogue to explore the merits and potential terms of a transaction". It adds that it has made "numerous efforts to engage Hardinge management in negotiations with respect to the proposed transaction for more than two months, including the delivery of a draft confidentiality agreement to Hardinge on November 25, 2009, and a formal communication to Hardinge of Romi's intentions to pursue a business combination on December 14, 2009". Hardinge Inc has made no public statement. (UPDATE, 6 February: Reuters has reported that Hardinge Inc will evaluate the $90 million unsolicited buyout offer and has engaged Jefferies & Co as its financial adviser, and Wachtell, Lipton, Rosen & Katz as its legal adviser, to assist in evaluating and responding to Romi's proposal.)
Romi and Bridgeport used to have a relationship, with the then independent Bridgeport under Textron ownership making an agreement in 1982 with Romi S.A. of Brazil to import Romi's standard engine lathes. Hardinge Inc acquired the Bridgeport brand in 2004.
Hardinge Inc incorporates the Bridgeport brand (machining/grinding centres) and grinding machine tool brands Tschudin, Kellenberger, Tripet and Hauser. Hardinge also makes Hardinge brand CNC lathes and workholding equipment. Most recently, the company has moved out of the volume machine business to concentrate on high technology, demanding applications.
In June last year, John McTernan, Hardinge's European sales, marketing and service director based in the UK, said: "Hardinge has re-positioned itself over the last 12 months. We are no longer in the commodity-end of the market, but instead are now totally-focused on delivering high-end, advanced technology and manufacturing solutions to customers."
Romi offers engine lathes, along with CNC lathes/turning centres and machining centres. Livaldo Aguiar dos Santos, chief executive officer of Romi, said in the statement posted on the company's website: "We have great respect for Hardinge and together we can create a strong, diversified global platform for the machine tools business with considerable opportunities for further growth and innovation."
"Our all-cash offer provides immediate liquidity at a superior value to Hardinge's future prospects as a stand-alone company. In addition to delivering a significant premium to Hardinge shareholders, Romi believes the combination is in the best interests of Hardinge's employees, customers and partners. The combined company will have the size and scale to invest in strategic opportunities to thrive in an increasingly challenging and competitive industry environment and to expand in emerging markets," said Mr dos Santos.
Most recently, Romi sent a letter to Hardinge on December 30, 2009 in which Romi submitted an offer to acquire Hardinge at a price per share of up to $8.00. On January 26, 2010, "without making any effort to discuss the details of Romi's proposal, Hardinge sent a letter rejecting the Offer," says the statement.
The offer made by Romi is for $8.00 per share. Reports say that this represents a premium of 46 per cent to Hardinge's closing share price on February 3, 2010 - the last trading day prior to the public disclosure of Romi's offer - and a premium of over 63 per cent to Hardinge's closing share price on December 14, 2009, when Romi first formally communicated its interest to Hardinge in pursuing a business combination, and a premium of over 48 per cent to Hardinge's 90-day weighted average share price through Wednesday, February 3, 2010. The offer is not subject to any financing condition and will be funded entirely from Romi's internal resources.
Hardinge Inc is due to release its 2009 fourth quarter and year end results on February 18, 2010.
[Products covered: machining centres, 5-axis machining centres, turbine blade grinding machines, engine lathes, turning centres, CNC lathes, workholding]
|
|