UPDATE: Wesco International drops bid for IDG
Industrial Distribution staff -- Industrial Distribution, 4/22/2008 8:59:00 AM
Wesco International Inc. bailed out of the bidding war for Industrial Distribution Group Inc. after learning of Platinum Equity Advisors LLC’s $130.6 million, $11.80-per-share offer for the Atlanta-based MRO distributor earlier April 22.“Wesco … announced today that it would not submit any further bids based on [IDG’s] press release issued this morning that it had received a higher offer,” the Pittsburgh-based electrical and MRO distributor said in a statement.
It’s the latest volley in a bidding war over IDG, which began with Platinum’s initial offer of $113 million, or $10.30 per share.
IDG’s board accepted that offer, but later revealed that an entity then known only as “Bidder D”—which turned out to be Wesco, the parent company of Wesco Distribution—had submitted a $120.7 million, $11 per-share counter-offer.
Then another private equity player, Luther King Capital Management Corp., said it would pay $128.4 million ($11.70 per share), prompting Wesco to up the ante with a $130 million, $11.75-per-share offer.
IDG’s board then rescinded its acceptance of the original bid from Platinum in favor of the last Wesco bid. After the Luther King bid, IDG said its board was holding to its recommendation to accept the Platinum Equity offer. But the final Wesco proposal prompted the Atlanta-based MRO distributor’s board to withdraw that recommendation and approve Wesco's offer.
Luther King has until 3 p.m. April 22 to submit counter-offers; the latest Platinum bid expires at 5 p.m., but if Luther King makes a counter offer, Platinum would have three days to respond.
“At a special meeting held late yesterday, the [IDG] board of directors determined unanimously that Platinum Equity's new, $11.80-per-share offer … would be accepted if [IDG] does not receive an executed definitive offer, with superior terms for the company's stockholders, from Wesco or Luther King Capital Management,” IDG said in a statement.
“We are pleased by Platinum Equity's decision to offer more value to IDG's stockholders for their company," IDG chairman Richard Seigel said. “At the same time, we obviously want to take advantage of the opportunity to permit Wesco and Luther King Capital Management to assess their respective interests in possibly acquiring the company at a price above the $11.80 per share that has been offered by Platinum Equity.”
IDG’s board said it scheduled a special meeting April 22 to discuss any counter-offers and would issue a statement after the market closes to report any developments. Stay tuned to INDUSTRIAL DISTRIBUTION for full coverage of this developing story.
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