New York-based Sithe Energies has terminated its previously announced merger agreement with Energy Factors and instead will pursue a $6.50-per-share cash tender offer for the San Diego-based company's outstanding shares.
Sithe, which owns 55% of Energy Factors' outstanding shares, in November offered to pay $6.50 per share, or $27 million for Energy Factors' remaining shares as part of a merger involving the two companies.
Sithe abandoned that proposed merger after a special committee of Energy Factors board members determined that the $6.50-per-share offer was "inadequate."
Sithe's newly announced tender offer "would allow Energy Factors' shareholders to make their own determination as to whether or not to accept" Sithe's $6.50-per-share offer, according to Sithe Energies Chief Executive Officer William Kriegel.
Kriegel complained that Energy Factors' board "refused to engage in meaningful negotiations" over an appropriate price for Energy Factors' outstanding stock.
Shearson Lehman Brothers, which will manage the tender offer, previously had issued an opinion that the $6.50-per-share offer was a fair price. However, a class-action suit filed in December in New York State by a dissident shareholder described the $6.50-per-share offer as "inadequate."