Hardinge’s Board of Directors Unanimously Recommends Rejection of Romi’s Tender Offer
05 Abril 2010 - 8:30AM
Business Wire
Hardinge Inc. (NASDAQ: HDNG) (“Hardinge”) today announced that
its Board of Directors voted unanimously to recommend that Hardinge
shareholders reject Indústrias Romi S.A.’s (Bovespa: ROMI3)
(“Romi”) $8.00 per common share cash tender offer (the “Offer”) as
grossly inadequate, opportunistic, and not in the best interests of
Hardinge and its shareholders.
The Board noted that it unanimously rejected a proposal from
Romi at the same price on February 18, 2010. The Company has filed
a Schedule 14D-9 with the Securities and Exchange Commission
(“SEC”) detailing the reasons for its rejection of Romi’s offer.
The full text of the filing will be available in the Investor
Relations section of Hardinge’s website at http://www.hardinge.com
and on the SEC website at http://www.sec.gov/.
Kyle H. Seymour, Non-Executive Chairman of the Board of
Directors of Hardinge, said, “Our Board’s position remains clear
and unanimous – this is an opportunistic attempt by Romi to acquire
Hardinge at a grossly inadequate price that fails to reflect the
value of our significant industry position, global market presence,
and future growth prospects. The Hardinge Board strongly urges
shareholders to reject Romi’s offer and not tender their
shares.”
Richard L. Simons, President & Chief Executive Officer of
Hardinge, added, “Over the past year, we have made substantial
progress positioning Hardinge for significantly improved
performance, including taking steps that have generated annual
fixed cost savings of approximately $30 million. Management and the
Board believe that the Company is poised to reap the benefits of
its streamlined operating structure and to outperform market
improvements as the machine tool industry recovers.”
In making its determination, the Hardinge Board, taking into
account advice received from its legal and financial advisors and
senior management of the Company, considered numerous factors,
including their belief that:
Hardinge is well-positioned to emerge strongly from the
current economic downturn and to benefit significantly as the
machine tool industry recovers.
- The Board believes that Hardinge
and its shareholders are poised to realize significant benefits as
the economy emerges from the recession and as industrial production
rebounds in Hardinge’s key geographical markets.
- A successful acquisition of
Hardinge by Romi at this time would enable Romi, instead of
Hardinge shareholders, to capture the benefits of Hardinge’s
improved financial performance in such a recovery.
Romi’s Offer is grossly inadequate.
- The Board does not believe that
the $8.00 per share price offered by Romi reflects the underlying
value of Hardinge’s assets, operations and growth prospects, and
the significant additional value that the Board and senior
management believe would result from the continued implementation
of Hardinge’s strategic plan.
- Various value-creating and
cost-saving initiatives have provided additional value to Hardinge
and its shareholders that is not reflected in Romi’s Offer. Several
initiatives undertaken by Hardinge in 2008 and 2009 have
significantly improved the Company’s operating cost structure,
working capital levels and business model, generating annual fixed
cost savings of approximately $30 million and a significantly
reduced breakeven point in U.S. operations.
Romi’s Offer is opportunistic.
- The Board believes that Romi, a
fellow industry participant, recognizes the significant medium- and
long-term value creation potential of Hardinge’s assets and
strategic plan, recent value-creation and cost-saving initiatives
and potential returns from the pursuit of new marketplace
opportunities, and has opportunistically timed its Offer to acquire
Hardinge before the full impact of these factors and the industry’s
recovery can be reflected in Hardinge’s results of operations and
share price.
- The Board also notes that, even
though after Romi first made its $8.00 per share proposal Hardinge
announced an approximate $27 million improvement in the funded
status of its pension plans, Romi commenced its tender offer at the
same $8.00 price previously proposed and rejected without giving
any credit for this increased value.
Romi’s Offer values Hardinge at a price significantly below
historical valuations.
- Prior to the fourth quarter of
2008, when the economic recession took a significant toll on
Hardinge and the machine tool industry as a whole, the market price
of Hardinge common stock regularly traded in the double digits,
ranging from the mid-teens to significantly higher trading levels
in previous periods.
- The Board believes that a return
to a double digit stock price for Hardinge’s common shares is
realistically attainable in the medium term if management
projections are met, with the key variables being how soon the
industry will turn upward and the strength of the rebound.
Romi’s Offer is highly conditional.
- The Offer includes over 20
conditions to the obligations of Romi, several of which are vague,
have very low thresholds or give Romi broad discretion to determine
whether or not they are satisfied, resulting in substantial
uncertainty as to whether Romi would be obligated to consummate the
Offer.
Romi’s Offer is coercive.
- The Board believes that a tender
offer for a small-cap company like Hardinge is structurally
coercive. In the Offer, Romi specifically states that shareholders
who do not tender their shares may be left holding illiquid
securities, because of the small public float and the risk that the
issuer is delisted.
- The terms of the Offer further
validate this concern and justify the Board’s prior actions. In the
Offer, Romi indicates that even if the Offer is consummated, it
reserves the right not to propose the second-step merger “or any
other merger or other similar business combination with the
Company” in the Offer.
Jefferies & Company, Inc. is acting as financial advisor to
Hardinge and Wachtell, Lipton, Rosen & Katz is providing legal
advice. Questions and requests for assistance regarding the tender
offer may be directed to Hardinge’s Information Agent, Okapi
Partners LLC, toll-free at (877) 279-2311.
About Hardinge Inc.
Hardinge is a global designer, manufacturer and distributor of
machine tools, specializing in SUPER
PRECISION™ and precision CNC
Lathes, high performance Machining Centers, high-end cylindrical
and jig Grinding Machines,
and technologically advanced Workholding & Rotary Products. The Company’s products
are distributed to most of the industrialized markets around the
world with approximately 70% of the 2009 sales outside of North
America. Hardinge has a very diverse international customer base
and serves a wide variety of end-user markets. This customer base
includes metalworking manufacturers which make parts for a variety
of industries, as well as a wide range of end users in the
aerospace, agricultural, transportation, basic consumer goods,
communications and electronics, construction, defense, energy,
pharmaceutical and medical equipment, and recreation industries,
among others. The Company has manufacturing operations in the
United States, Switzerland, Taiwan, and China. Hardinge’s common
stock trades on NASDAQ Global Select Market under the symbol,
“HDNG.” For more information, please visit
http://www.hardinge.com.
This news release contains forward-looking statements (within
the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended). Such statements are based on management’s current
expectations that involve risks and uncertainties. Any statements
that are not statements of historical fact or that are about future
events may be deemed to be forward-looking statements. For example,
words such as "may," "will," "should," "estimates," "predicts,"
"potential," "continue," "strategy," "believes," "anticipates,"
"plans," "expects," "intends," and similar expressions are intended
to identify forward-looking statements. Hardinge’s actual results
or outcomes and the timing of certain events may differ
significantly from those discussed in any forward-looking
statements due to a variety of factors, including those described
in Hardinge’s SEC reports, including its March 15, 2010 Form 10-K.
Hardinge undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events, or otherwise. Hardinge notes that forward-looking
statements made in connection with a tender offer are not subject
to the safe harbors created by the Private Securities Litigation
Reform Act of 1995. Hardinge is not waiving any other defenses that
may be available under applicable law.
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