TAUNTON, Mass. – Westerbeke Corp., which designs, manufactures and sells diesel gasoline marine engines and other products, has rejected yet another purchase offer from Valley Detroit Diesel Allison (VDDA), the company reported in Form 8-K, filed with the U.S. Securities and Exchange Commission yesterday.
On September 26, the special committee of the board of directors of Westerbeke Corp. received from VDDA, a potential strategic acquirer of the company, a letter offering to conduct a tender offer to purchase all of the outstanding common stock of the company at a price of $3.75 per share.
The offer was conditioned upon at least 90 percent of the outstanding shares of common stock of the company being tendered in the tender offer and certain other conditions, according to Westerbeke.
In response, John H. Westerbeke, Jr., the company’s chairman, chief executive officer and president, and the beneficial holder of a majority of the company’s outstanding common stock, stated that he would not sell the shares of the company’s common stock held by acquisition and beneficially owned by him pursuant to the offer presented.
In the same discussion, Westerbeke also stated that he would not agree to an increase in the $3.00 per share merger consideration and that he had not decided at that time whether to extend the October 31 date set forth in Section 9.01(c) of the Agreement and Plan of Merger between the company and VVDA, after which either party may terminate the merger agreement if the merger has not been consummated.
On October 6, the members of the special committee met and voted unanimously that the company not pursue the latest VDDA offer, reported Westerbeke.
The basis of the special committee’s determination was that under the terms of the offer, the proposed acquisition would require the tender of at least 90 percent of the shares of the company’s outstanding common stock, and such condition could not be achieved given Mr. Westerbeke’s stated unwillingness to tender the shares of the company’s common stock beneficially owned by him in connection with the offer. The special committee determined that it would be imprudent to expend the company’s resources pursuing a transaction that could not be consummated.
When informing counsel for VDDA of its decision, counsel for the special committee pointed out that the VDDA proposal incorrectly describes as an appraisal the fairness opinion provided by Stout Risius Ross, Inc. in connection with the company’s merger with VVDA and proposed that VDDA remove the 90 percent tender condition in its proposal and/or offer to purchase the shares of the company’s outstanding common stock beneficially held by stockholders other than Mr. Westerbeke.
VDDA is a distributor, manufacturer and servicer of marine engines and other equipment based in City of Industry, Calif.
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