UPDATE: IDG fields another buyout offer

Industrial Distribution staff -- Industrial Distribution, 4/7/2008 6:03:00 AM

A third, unidentified company threw its hat in the ring to buy Industrial Distribution Group Inc. with a roughly $120.7 million bid for the Atlanta-based MRO distributor.

In a statement released April 7, IDG said its latest suitor, identified only as "Bidder D," submitted an $11-per-share offer March 31. 

Luther King Capital Management Corp. made a $128.4 million counter-offer April 4 to trump Platinum Equity Advisors LLC’s $113 million bid, submitted in February. Luther King, which already owns nearly 15 percent of IDG, said its $11.70 per share bid is a 13.6 percent increase over the Platinum Equity offer of $10.30 per share.

IDG said its board, which initially approved the Platinum Equity offer, is still on track to consider a buyout at its May 1 shareholder's meeting. Each of the two more recent bids is "more favorable to [IDG's] stockholders" than the Platinum Equity bid, IDG said in the statement, adding that the Platinum bid remains "effective and binding" and the equity firm can match either of the superior offers if one is approved.

"Moreover, because each proposal is subject to some level of due diligence, it is possible that neither proposal will lead to a binding agreement to acquire [IDG] at any price," the company said in the statement. 

"Our fiduciary obligations to our stockholders, as well as our contractual obligations to Platinum Equity, are consistent with allowing a reasonable and appropriate opportunity for the due diligence and discussion both bidders have requested. However, both proposals are subject to significant conditions that are beyond IDG's control, and thus we remain committed to our binding agreement with Platinum Equity, which, if approved by the stockholders and consummated, would deliver significant value to all of our stockholders, as discussed in IDG's proxy statement," IDG chairman Richard Seigel said in the statement.

The mystery suitor's proposal is still subject to due diligence and is non-binding, IDG said, meaning its identity will remain hidden.

"The board of directors determined that it could be disruptive to [IDG's] ongoing operations to identify Bidder D specifically at this stage," the company said in the statement.

More to come as INDUSTRIAL DISTRIBUTION tracks this breaking story.

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