Bairnco Board Recommends Shareholders Reject $12 Per Share Steel Partners Offer
06 Juli 2006 - 11:31PM
Business Wire
Bairnco Corporation (NYSE: BZ) today announced that its Board of
Directors voted unanimously to recommend that Bairnco shareholders
not tender their shares to Steel Partners II, L.P. and reject Steel
Partners' unsolicited tender offer to acquire all of the
outstanding shares of Bairnco common stock at $12.00 per share,
having determined that the offer is inadequate and not in the best
interests of Bairnco's shareholders. Bairnco Chairman and Chief
Executive Officer Luke E. Fichthorn III stated, "Our Board's
unanimous position is clear. Steel Partners' offer is an
opportunistic attempt to acquire Bairnco at an inadequate price
before the full impact of recent initiatives is reflected in the
Company's share price. The Company initiated a strategic program
focusing each of its business units on two goals: becoming low cost
producers in the long-term while at the same time continuing to
invest in marketing and development to grow new product and service
revenues. We remain committed to our long-term strategy and believe
it is the best course for Bairnco at this time. "Specifically,
Bairnco recently consolidated its operations into several modern,
efficient plants both in the U.S. and abroad to reduce operating
costs, improve quality and capitalize on compelling market trends.
While these strategic initiatives have demanded significant
investment, the Company is now poised to benefit both from an
operating and financial standpoint, which will begin to be
reflected in our results for the second half of 2006 and are
expected to provide a major benefit to the Company in 2007 and
beyond. "In addition, we have several targeted initiatives intended
to further leverage our strong balance sheet and increase
shareholder value. We have acquisition opportunities under active
consideration, which would both fit with our existing businesses
and be accretive to earnings. We also intend to continue to
repurchase our common stock, depending on the stock price and the
status of the acquisitions, and remain committed to returning value
through consistent increases in our dividend payments, with our
next increase to $0.07 per share from $0.06 per share planned to
occur in the third quarter of 2006, pending Board approval." The
Company announced that based on its current operating plan, it
expects earnings per share for the second half of 2006 to be in the
range of $0.26 to $0.34, excluding the impact of professional fees
related to the Steel Partners' tender offer, as compared to $0.15
for the same period last year. For the full year 2006, excluding
the impact of professional fees related to the Steel Partners'
tender offer, operating profits are expected to be in the range of
$7.25 million to $7.75 million, and earnings per share are expected
to grow to between $0.56 and $0.64. Although final budgets are not
done until later in the year, current projections for 2007 are for
earnings per share in the range of $0.95 to $1.05 with sales
growing to between $175 million and $185 million and operating
profit in the range of $11 million to $12 million. In recommending
that shareholders reject the offer, the Bairnco Board considered a
number of factors, including the following: -- The Board's belief
that the offer price is inadequate and that it does not reflect the
long-term value inherent in the Company. -- The Board's
understanding of and familiarity with Bairnco's business, financial
condition, current business strategy and future prospects, which
management and the Board believe have not been fully reflected in
the Company's results of operations or share price. -- The Board's
view that the offer represents an opportunistic attempt by Steel
Partners to acquire the Company at a time when the Company's stock
price was at a 20% discount to its high for the year. -- The
Board's belief that Steel Partners has opportunistically timed its
offer to take advantage of depressed 2005 results stemming from
unusual costs and delayed savings associated with the Company's
strategic initiatives before the fruits of those initiatives have
been fully reflected in the Company's stock price. -- The fact that
the offer is highly conditional, which results in significant
uncertainty that the offer will be consummated. -- The opinion of
Lazard Freres & Co. LLC, financial advisor to the Company, that
as of July 6, 2006, the consideration to be paid to the holders of
the Company's common stock pursuant to the offer is inadequate,
from a financial point of view, to such holders (other than Steel
Partners and its affiliates). -- The Board's commitment to the
long-term interests of the Company and its stockholders, and to
pursuing strategies that realize the Company's long-term value. The
full text of the Board's recommendation is contained in Bairnco's
Schedule 14D-9, which will be available on the SEC's website at
www.sec.gov or on Bairnco's web site at www.bairnco.com. Bairnco
also announced today that the Board took action under its Rights
Plan to postpone the distribution date for the rights until such
time as the Board shall designate by subsequent action by the
Board. Until the distribution date, the rights will continue to be
evidenced by the certificates for the Company's common stock, and
will be transferred with and only with the Company's common stock.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995 Statements in this press release referring to
the expected future plans and performance of the Corporation are
forward-looking statements. Actual future results may differ
materially from such statements. Factors that could affect future
performance include, but are not limited to, changes in U.S. or
international economic or political conditions, such as inflation
or fluctuations in interest or foreign exchange rates; changes in
the market for raw or packaging materials which could impact the
Corporation's manufacturing costs; changes in the product mix;
changes in the pricing of the products of the Corporation or its
competitors; the impact on production output and costs from the
availability of energy sources and related pricing; the market
demand and acceptance of the Corporation's existing and new
products; the impact of competitive products; the loss of a
significant customer or supplier; production delays or
inefficiencies; the ability to achieve anticipated revenue growth,
synergies and other cost savings in connection with acquisitions
and plant consolidations; the costs and other effects of legal and
administrative cases and proceedings, settlements and
investigations; the costs and other effects of complying with
environmental regulatory requirements; disruptions in operations
due to labor disputes; and losses due to natural disasters where
the Corporation is self-insured. While the Corporation periodically
reassesses material trends and uncertainties affecting the
Corporation's results of operations and financial condition in
connection with its preparation of its press releases, the
Corporation does not intend to review or revise any particular
forward-looking statement referenced herein in light of future
events. About Bairnco Bairnco Corporation is a diversified
multinational company that operates two distinct businesses --
Arlon (Electronic Materials and Coated Materials segments) and
Kasco (Replacement Products and Services segment). Arlon's
principal products include high technology materials for the
printed circuit board industry, cast and calendered vinyl film
systems, custom-engineered laminates and special silicone rubber
compounds and components. Kasco's principal products include
replacement band saw blades for cutting meat, fish, wood and metal,
and on site maintenance primarily in the meat and deli departments.
Kasco also distributes equipment to the food industry in Canada and
France. http://www.bairnco.com Additional Information and Where to
Find It Bairnco advises its stockholders to read carefully
Bairnco's solicitation/recommendation statement on Schedule 14D-9,
regarding the tender offer referred to in this press release,
because it will contain important information. Stockholders may
obtain a free copy of the solicitation/recommendation statement,
which will be filed today by Bairnco with the SEC, on the SEC's web
site at www.sec.gov or on Bairnco's web site at www.bairnco.com or
by contacting Georgeson Shareholder Communications, Inc. at (212)
440-9800 (for Banks and Brokers) or toll free at (866) 695-6077.
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