Elkcorp (NYSE:ELK)
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ElkCorp (NYSE:ELK), a leading manufacturer of roofing and building
products, today announced that The Carlyle Group (Carlyle) has agreed to
increase its tender offer to acquire all of the outstanding shares of
ElkCorp common stock to $42.00 per share in cash, up from the previous
offer of $40.50 per share, which was announced on January 16, 2007.
ElkCorp and Carlyle amended their previously announced merger agreement
to reflect this increased price.
Carlyle’s tender offer, which commenced on
January 18, 2007, will expire at midnight on February 14, 2007, unless
extended in accordance with the terms of the merger agreement and the
applicable rules and regulations of the Securities and Exchange
Commission (SEC).
As previously announced, following completion of the tender offer in
which a majority of ElkCorp’s outstanding
shares are tendered, Carlyle has committed to complete a second-step
merger in which all remaining shares of ElkCorp common stock will be
converted into the right to receive the same price paid per share in the
tender offer. Carlyle has obtained fully committed financing for the
tender offer and the second-step merger.
Upon the recommendation of a special committee of ElkCorp’s
Board consisting solely of independent, non-management directors, ElkCorp’s
Board has approved the revised merger agreement and recommends that
shareholders tender their shares into the Carlyle offer. As previously
disclosed, on January 18, 2007 an affiliate of Building Materials
Corporation of America (BMCA) had commenced a cash tender offer to
purchase all of ElkCorp’s shares at $42.00 per
share.
Carlyle’s tender offer of $42.00 values the
Company at approximately $1.1 billion, including the assumption of
approximately $173 million of net debt. The revised per share price
represents a premium of approximately 67% 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.
The tender offer is subject to a majority of ElkCorp’s
outstanding shares being tendered into the offer and other customary
closing conditions. The transaction is not subject to any financing
condition and Carlyle has obtained fully committed financing for both
the tender offer and the second-step merger.
The transaction will be financed through a combination of equity and
debt financing, with the debt financing committed by Bank of America,
N.A., Merrill Lynch Capital Corporation, Inc. and General Electric
Capital Corporation and certain of their affiliates. Merrill Lynch,
Pierce, Fenner & Smith Inc. and Banc of America Securities LLC are
financial advisors to The Carlyle Group, and Debevoise & Plimpton LLP is
legal advisor. UBS Investment Bank is financial advisor to ElkCorp, and
Wachtell, Lipton, Rosen & Katz is legal advisor. Citigroup Corporate and
Investment Banking is financial advisor to the Special Committee.
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
About The Carlyle Group
The Carlyle Group is a global private equity firm with $46.9 billion
under management. Carlyle invests in buyouts, venture & growth capital,
real estate and leveraged finance in Asia, Europe and North America,
focusing on aerospace & defense, automotive & transportation, consumer &
retail, energy & power, healthcare, industrial, technology & business
services and telecommunications & media. Since 1987, the firm has
invested $24 billion of equity in 576 transactions for a total purchase
price of $101.8 billion. The Carlyle Group employs more than 740 people
in 16 countries. In the aggregate, Carlyle’s
portfolio companies have more than $68 billion in revenue and employ
more than 200,000 people around the world. www.carlyle.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, merger 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 original Carlyle tender offer announced on January 18, 2007,
ElkCorp has filed a solicitation/recommendation statement on Schedule
14D-9 with the Securities and Exchange Commission (the "SEC"), and
expects to file an amendment thereto in respect of the increased
purchase price. 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. 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 will contain
important information about the tender offer and the proposed merger.
Free copies of materials which will be 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 a proxy statement relating to the
merger, if one is required to be filed, and in the
solicitation/recommendation statements on Schedule 14D-9 when they
become available.