Takeover target Alesco Corporation says it remains unconvinced by predator DuluxGroup’s claim that its takeover offer is compelling.
Alesco said in a letter to shareholders on Wednesday that DuluxGroup had done nothing to address its concerns that the takeover offer was inadequate, highly conditional and opportunistic.
Alesco said nearly two months had elapsed since DuluxGroup had announced its offer, yet DuluxGroup had received virtually no acceptances, with shareholders holding just 1.02 per cent of Alesco shares accepting the offer to date.
Consequently, said Alesco, DuluxGroup had extended the offer period to July 20, 2012.
“DuluxGroup has not ruled out increasing its offer,” Alesco said.
“At the same time, DuluxGroup has made no attempt to engage with your board on addressing the inadequacy of its offer.
“Your board remains unconvinced by DuluxGroup’s rhetoric.”
Paint maker DuluxGroup has offered $2 for each share of building products supplier Alesco – valuing Alesco at $188.4 million – but Alesco has rejected it as too low.
Independent expert Lonergan Edwards & Associates has valued Alesco at between $2.23 and $2.52 a share and concluded that DuluxGroup’s offer was neither fair nor reasonable.
DuluxGroup has said the independent expert’s valuation is flawed.
DuluxGroup has said that a takeover of Alesco makes good sense strategically, but it is not a “must do” deal and that it would rather hold its current 19.96 per cent stake in Alesco rather than overpay for a greater stake.
A DuluxGroup spokesperson said on Wednesday that the Alesco board had not responded to the serious concerns that DuluxGroup had raised.
“Why doesn’t the Alesco board release a valuation based on how they intend to run the business, rather than a theoretical break-up scenario, and compare our $2.00 cash offer to that?” the spokesperson said.
“That would be much more useful to their shareholders than anything they have released to date.”
Shares in Alesco were two cents lower at $1.94 on Wednesday. DuluxGroup was five cents higher at $2.97.
