Elkcorp (NYSE:ELK)
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ElkCorp (NYSE: ELK), a manufacturer of roofing and building products,
today announced that ElkCorp and The Carlyle Group have amended their
previously announced merger agreement. Under the terms of the revised
agreement, Carlyle will commence a tender offer to acquire all of the
outstanding shares of ElkCorp common stock at a price of $40.50 per
share in cash. The offer will commence on or before January 18, 2007,
and will expire at midnight on the 20th business day following and
including the commencement date, unless extended in accordance with the
terms of the merger agreement and the applicable rules and regulations
of the Securities and Exchange Commission (SEC). 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. The Board
continues to recommend that shareholders reject the $40.00 per share
cash tender offer from Building Materials Corporation of America (“BMCA”).
Carlyle’s tender offer of $40.50 values the
Company at approximately $1.05 billion, including the assumption of
approximately $173 million of net debt, and represents a $2.50 per share
increase over the $38 price per share provided in the original merger
agreement announced on December 18, 2006.
The revised per share price represents a premium of approximately 61%
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.
“ElkCorp is pleased that Carlyle's revised
offer delivers increased value to ElkCorp's shareholders and a quicker
timetable,” said Thomas D. Karol, Chairman and
Chief Executive Officer of ElkCorp.
Glenn Youngkin, Carlyle Managing Director and Head of the Global
Industrial team, said, “Our increased offer
demonstrates our commitment to this transaction and our confidence in
the future of ElkCorp.”
The tender offer is subject to a majority of ElkCorp’s
outstanding shares being tendered in 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 Carlyle tender offer, ElkCorp expects to file a
solicitation/recommendation statement 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 BMCA, ElkCorp
has filed a solicitation/recommendation statement with the SEC. Investors
and security holders are strongly advised to read these documents when
they become 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 proxies from its
shareholders in connection with the proposed merger. Information
concerning the interests of ElkCorp’s
participants in the solicitation, which may, in some cases, be different
than those of ElkCorp shareholders generally, 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 statement when it becomes available.