Better Bid for Ferro (FOE)? Investors are Expecting One
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Ferro Corp (NYSE: FOE) shares are up over 2 percent Tuesday amid speculation that the company might be able to draw in a higher bid.
Early in March, Ferro disclosed it rejected an offer of $6.50 per share made by A. Schulman (Nasdaq: SHLM), saying it was a "low-ball" bid. Schulman has since said it may raise its bid if it gets the chance to look at Ferro's books.
The $6.50 bid valued Ferro at $875 million, including net debt and exercisable options.
Bloomberg pointed out today that an offer of $9 would be a 68 percent premium to Ferro shares before the initial bid was disclosed and would be the highest premium for an specialty chemicals deal done in the last 10 years with a value over $500 million.
Notably, activist hedge funds FrontFour Capital Group LLC and Quinpario Partners LLC will submit a plan to overhaul Ferro's board next month, which could pave the way for a deal to happen. Some speculate that Schulman might also be waiting for the May 15th event before making its next move.
Though $9 might seem rich, an increase of $1 to $2 per share would seem more reasonable and open talks with Ferro.
Early in March, Ferro disclosed it rejected an offer of $6.50 per share made by A. Schulman (Nasdaq: SHLM), saying it was a "low-ball" bid. Schulman has since said it may raise its bid if it gets the chance to look at Ferro's books.
The $6.50 bid valued Ferro at $875 million, including net debt and exercisable options.
Bloomberg pointed out today that an offer of $9 would be a 68 percent premium to Ferro shares before the initial bid was disclosed and would be the highest premium for an specialty chemicals deal done in the last 10 years with a value over $500 million.
Notably, activist hedge funds FrontFour Capital Group LLC and Quinpario Partners LLC will submit a plan to overhaul Ferro's board next month, which could pave the way for a deal to happen. Some speculate that Schulman might also be waiting for the May 15th event before making its next move.
Though $9 might seem rich, an increase of $1 to $2 per share would seem more reasonable and open talks with Ferro.
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