Rebuffed by takeover target Circor, Stamford”™s industrial products manufacturer Crane Co. said that Circor”™s statements “are highly unrealistic and illustrates why (our) superior, all-cash offer of $45 per share represents the best option for Circor shareholders.”
Crane initially approached Scott Buckhout, president and CEO of Circor ”“ which manufactures flow and motion control products for a variety of sectors ”“ on April 30 with the proposal, which at that time it said reflected an enterprise value of about $1.7 billion at a multiple of approximately 13.5x the previous 12-month adjusted EBITDA.
On May 13, the Circor Board of Directors “summarily rejected Crane Co.”™s proposal with no offer of discussions or due diligence,” according to Crane.
“While we had hoped to complete a transaction privately, the board”™s rejection of our proposal without comment or discussion led to our decision to make our proposal known to Circor shareholders so they can express their views directly to the Circor board,” Crane Co. President and CEO Max Mitchell said on May 21.
Circor, based in Burlington, Massachusetts, announced yesterday that its board had unanimously rejected the bid and was recommending that its shareholders not tender their shares into the offer.
“The board, in consultation with its financial advisers, determined that the offer substantially undervalues the company and is low value, highly conditional and opportunistic and not in the best interests of Circor shareholders,” the company said.
In his response, Mitchell said that, “Circor”™s short-term plan, while expected, is yet another set of empty promises. This, coupled with Circor”™s track record of repeatedly missing its own targets, significant underperformance, and value destruction, make it extremely clear that Crane Co.”™s $45 per share offer represents the superior option, with certain and attractive value.
“Circor shareholders have both publicly and privately expressed their frustration with Circor”™s ability to drive value for them,” Mitchell continued. “We urge them to tender their shares to encourage Circor”™s board to engage with us in good faith negotiation.”
