Elkcorp (NYSE:ELK)
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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.