In his letter, Falcone said HC2 would pay $950 million for Andersons grain group and rail group and make stalking horse bids for the ethanol group and the nutrient group.
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(NYSEMKT:HCHC) said that it had made an offer to acquire the company for $37.00 per share in cash – Andersons rejected the unsolicited takeover proposal before the opening bell on Wednesday -.
In its most recent quarter, Andersons posted loss of $14.7 million, down from a year-earlier profit of $4.1 million.
Andersons stock traded up more than 34% Wednesday morning to $34.50, after closing down more than 2% on Tuesday at $25.94.
“We believe HC2’s proposals ignore our value and prospects as a standalone entity and represent an opportunistic attempt to acquire the company at a low point in the industry cycle”, Andersons Chairman Mike Anderson said in a news release.
So what: The agricultural company responded to disclosure from HC2, the bidding company led by Phil Falcone, on Tuesday that it had offered to buy out The Andersons, and the target promptly dismissed the offer.
The approach from HC2 could now open a bidding war as Andersons is one of the few remaining independent USA grain traders, and several larger traders are trying to expand in the key American farm market.
The present ideals stocks in Andersons based on a letter a 43% quality over rsquo & Wednesday;s final cost but well below the near-$70 maximum the stock.
The HC2 executive says The Andersons “has been poorly managed and has not been effective in extracting synergies of any significance” from its various operating units, including grain, rail, and retail.
Other potential bidders could include Glencore, Archer-Daniels-Midland, Bunge, Cargill and Louis Dreyfus, said Farha Aslam, an analyst at Stephens. The company has also sold off some underperfoming grain assets in Iowa.
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