Vulcan Objects to Hostile Takeover Attempt
by Shiva Olvde Dec 17, 2011
The hostile takeover attempt involving two rock-bashing companies is getting even hostile-er.
Vulcan Materials, the object of a nearly $5 billion hostile takeover offer this week, hasnt formally recommended its shareholders should say no friggin way to the bid from smaller rival Martin Marietta Materials. But in a court filing late Friday, Vulcan made it clear it is not happy at all with the Martin Marietta takeover effort. And Vulcan may be even more unhappy that Martin Marietta launched its hostile bid in December. (Some lawyers holiday trip was ruined, perhaps?)
In the court filing reviewed by Deal Journal, Vulcans lawyers describe Martin Mariettas hostile offer as a surprise attack by Martin Marietta, which they say was covertly plotting an unfriendly takeover even as the two producers of gravel, sand and other building materials were negotiating a merger for months under friendly terms.
Vulcans board hasnt taken a public position on the Martin Marietta offer. The deadline for doing so is Dec. 23. But the court filing makes it clear that Vulcan believes Martin Mariettas offer is underpriced and the terms of the proposed merger are so unachievable and slanted in Martin Mariettas favor that the deal is unworkable.
Among other terms, the stock-exchange offer Martin Marietta has laid out is conditioned on the approval of the Vulcan board, a condition Vulcans court filing said has no likelihood of being satisfied any time in the foreseeable future, if ever.
So well ruin the pre-Christmas surprise. Vulcans recommendation on the hostile offer will surely be No.
Vulcan also complained in the filing (repeatedly) that Martin Marietta waited until just before the holidays to launch its attack with a cheap acquisition bid that seeks to snatch Vulcan for the lowest possible price and on its own terms.
In a response released Saturday, Martin Marietta CEO C. Howard Nye said the Vulcan court filing seriously mischaracterizes the proposed merger deal, and rejects it even though, according to the papers, Vulcans Board of Directors has not taken a public position on Martin Mariettas proposal.