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Last Update: 04-Mar-13 07:53 ET
Ferro shares soar 27% following Schulman takeout for $6.50/share
A. Schulman (SHLM) announced today that it has made a proposal to the Board of Directors of Ferro (FOE) to acquire all of the outstanding shares of Ferro common stock for per-share consideration of $6.50, representing an estimated total enterprise value of approximately $855 million including total indebtedness. its proposed offer price of $6.50 per share includes an immediate cash payment of $3.25 for each Ferro share outstanding and $3.25 worth of A. Schulman common stock. When cost savings and synergies are fully implemented, A. Schulman estimates annual savings of $35 million over and above the previously announced Ferro targets. A. Schulman expressed its "strong intent" in pursuing the combination in a letter to Ferro on February 13, 2013. Ferro's Board rejected A. Schulman's offer and expressed their belief that the co should remain independent. A. Schulman first contacted Ferro in November 2012. Over the past five years, A. Schulman has generated more than $400 million in free cash flow. By comparison, Ferro has generated approximately $60 million during that same period. "A. Schulman's ability to generate strong free cash flow and its successful track record of integrating acquisitions and recognizing synergies ahead of schedule will help to accelerate and improve Ferro's value creation timeline... In addition to the near-term synergies and potential restructuring efficiencies, the long-term benefits to A. Schulman and Ferro shareholders include substantially enhanced returns on invested capital and further growth in higher-margin business segments and global markets. We expect the proposed transaction to be accretive in the first year following the acquisition... Accordingly, we request the Ferro Board reconsider their expressed position to remain independent. We also encourage Ferro shareholders to communicate with their Board, and ask them to re-examine their decision regarding our offer. We believe that our offer will bring attractive and timely value creation to both Ferro and A. Schulman shareholders."
