ElkCorp Board Receives Irrevocable Offer from BMCA at $43.50 Per Share
January 30 2007 - 9:28AM
Business Wire
ElkCorp (NYSE:ELK), a leading manufacturer of roofing and building
products, today announced it has received an irrevocable, binding
offer from Building Materials Corporation of America (BMCA) and
certain of its affiliates to enter into an agreement by which one
of these affiliates (BMCA Sub) would acquire all of the outstanding
common stock of ElkCorp at a price of $43.50 per share. ElkCorp�s
Board of Directors, on the unanimous recommendation of its Special
Committee of independent, non-management directors and with the
assistance of its outside legal and financial advisors, has
determined that BMCA�s offer, which was negotiated between the
parties, is a �Superior Proposal� within the meaning of ElkCorp�s
current agreement with affiliates of The Carlyle Group (Carlyle),
pursuant to which an affiliate of Carlyle previously commenced a
tender offer to acquire all of ElkCorp�s shares of common stock for
$42.00 per share in cash. Accordingly, ElkCorp yesterday issued to
Carlyle a notice of ElkCorp�s intention to terminate the merger
agreement between ElkCorp and Carlyle. The notice is subject to a 5
business day waiting period, during which Carlyle has the
opportunity to make a counter proposal. If no counter proposal is
made during this time or the ElkCorp Board determines that BMCA�s
offer remains superior to any counter proposal, ElkCorp will have
the right to terminate the Carlyle merger agreement upon payment to
Carlyle of a termination fee of $29 million, and ElkCorp would then
be free to accept BMCA�s offer. If ElkCorp accepts BMCA�s offer,
BMCA has agreed to reimburse the full amount of this termination
fee within one business day of payment by ElkCorp to Carlyle. Under
the terms of BMCA�s offer, BMCA Sub will amend its existing offer
to purchase all of the Company�s outstanding shares of common stock
for $43.50 per Share (the �Tender Offer�) to conform the Tender
Offer to the terms of BMCA�s proposed merger agreement. Under the
terms of the proposed agreement, following completion of the Tender
Offer, the parties will complete a second-step merger (the
�Merger�) in which all remaining outstanding shares will be
cancelled and converted into $43.50 cash per share, without
interest, or such higher amount as may be paid for shares in the
Tender Offer. Consummation of the Tender Offer and the Merger are
subject to customary closing conditions. The BMCA offer represents
a premium of approximately 73 percent over ElkCorp's closing share
price on November 3, 2006, the last trading day before ElkCorp
announced that its Board of Directors and management were
conducting a review of the Company's strategic alternatives. About
ElkCorp ElkCorp, through its subsidiaries, manufactures Elk brand
roofing and building products (90% of consolidated revenue) and
provides technologically advanced products and services to other
industries. Its common stock is listed on the New York Stock
Exchange (NYSE:ELK). www.elkcorp.com Forward-Looking Statements.
Statements made in this release, our website and in our other
public filings and releases, which are not historical facts contain
�forward-looking� statements (as defined in the Private Securities
Litigation Reform Act of 1995) that involve risks and uncertainties
and are subject to change at any time. These forward-looking
statements may include, but are not limited to, statements
containing words such as �anticipate,� �contemplate,� �believe,�
�plan,� �estimate,� �expect,� �intend,� �may,� �target,� �look
forward to� and similar expressions. Factors that could cause
actual results to differ materially include, but are not limited
to, the following: costs, litigation, an economic downturn or
changes in the laws affecting our business in those markets in
which we operate. There can be no assurance that the tender offer
by an affiliate of The Carlyle Group, the tender offer proposed by
BMCA or other any other transaction will be consummated, or if
consummated, that it will increase shareholder value. The
forward-looking statements involve known and unknown risks,
uncertainties and other factors that are, in some cases, beyond our
control. We caution investors that any forward-looking statements
made by us are not guarantees of future performance or events. We
disclaim any obligation to update any such factors or to announce
publicly the results of any revisions to any of the forward-looking
statements to reflect future events or developments, except to the
extent required by law. Additional Information and Where to Find
It. In connection with the Carlyle tender offer, ElkCorp has filed
a solicitation/recommendation statement on Schedule 14D-9 with the
Securities and Exchange Commission (the "SEC"). In connection with
the proposed merger with affiliates of The Carlyle Group, ElkCorp
expects to file a proxy statement with the SEC, if required by law.
In connection with the tender offer by an affiliate of BMCA,
ElkCorp expects to file a solicitation/recommendation statement on
Schedule 14D-9 with the SEC and, if ElkCorp terminates its merger
agreement with Carlyle and enters into a merger agreement with
BMCA, ElkCorp expects to file amendments to this Schedule 14D-9.
Investors and security holders are strongly advised to read these
documents (when they become available in the case of those not yet
available) because they contain or will contain important
information about the tender offers and the proposed mergers. Free
copies of materials which filed by ElkCorp will be available at the
SEC�s web site at www.sec.gov, or at the ElkCorp web site at
www.elkcorp.com, and will also be available, without charge, by
directing requests to ElkCorp, Investor Relations, 14911 Quorum
Drive, Suite 600, Dallas, TX 75254-1491, telephone (972) 851-0472.
ElkCorp and its directors, executive officers and other members of
its management and employees may be deemed participants in the
solicitation of tenders or proxies from its shareholders.
Information concerning the interests of ElkCorp's participants in
the solicitation is set forth in ElkCorp's proxy statements and
Annual Reports on Form 10-K, previously filed with the SEC, and
will be set forth in proxy statements relating to any merger, if
one is required to be filed, and in the solicitation/recommendation
statements on Schedule 14D-9 when they become available.
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