Merger Offer Deals Blow to Ropak Takeover Effort
After months of discussions and lawsuits, which culminated in Ropak Corp.’s $16-million hostile takeover bid for Milford, Ohio-based Buckhorn Inc. last March, the Fullerton maker of plastic shipping containers may have lost its fight.
Buckhorn, which makes plastic and rubber products largely for use in manufacturing heavy trucks, has accepted a $21.1-million merger agreement with Myers Industries Inc. of Akron, Ohio.
William Roper, chairman of Ropak, said he was taken by surprise when he first heard of the proposal late Sunday. “I only learned it the hard way. . . . I got a call from the Columbus Dispatch on Sunday,” he said.
“Evidently this Myers proposal was presented” at a meeting last week, at which time Buckhorn “accepted and blessed” it, Roper said.
Company officials at both Myers and Buckhorn were not available for comment. However, according to a half-page ad taken out by Myers Industries in Monday’s Wall Street Journal, the Akron maker of plastic, rubber and metal products and distributor of tire repair products is offering $5.375 per common share and $8.125 per Series A Convertible preferred share. The offer expires at midnight June 8 unless extended.
That offer is considerably more than the $4 per common share and $5.75 per preferred share that Ropak had offered. But Roper said that as late as two weeks ago the company had discussed the possibility of changing its offer to an “equity type security” in an amount that was closer to Myers’ current offer. However, he declined to disclose what the amount was.
He added that Buckhorn gave Myers Industries a “lock-up option” that provides granting options to the Akron company to purchase newly issued stocks if it does not obtain the majority ownership of the company through its tender offer. He said the majority in this case would be ownership of more than 51% of the company’s stock. Myers’ bid does not hinge on the Buckhorn charter’s “super-majority” clause requiring ownership of at least 80% of its stock in order for a shareholder to gain a controlling interest.
“One of our alternatives is to seek an injunction against the options. . . . We want a level playing field,” he said, adding that the “lock-up option” gives Myers an unfair advantage over Ropak’s takeover bid. He said Ropak will take the rest of the week to try to resolve the matter.
At the close of trading on Tuesday, Ropak’s and Buckhorn’s stock each remained unchanged at $6.75 and $5.125 respectively, while Myers’ stock increased 12.5 cents a share to $14.75.
