PLANO, Texas —CAS Investment Partners, which is the largest shareholder of At Home Group stock with 17%, is again urging the company’s board to reject the second offer from private equity firm Hellman & Friedman.
CAS Investment Partners says that Hellman & Friedman’s revised offer of $37 a share “grossly undervalues” the company and deprives stockholders of meaningful value.
Last month, H&F offered to acquire At Home Group Inc., the home décor superstore, for an all-cash transaction valued at $2.8 billion dollars or $36 per share. The company recently revised that estimate to $37 per share.
A letter sent to the At Home board from CAS Investment Partners outlined three conclusions: “At Home’s sales process has been flawed from the start and tainted by its chairman and CEO’s apparent incentives to reach a deal; the board’s Special Committee seemingly wrote off the company’s past several quarters of tangible business improvements and material progress; and the board’s Special Committee discounted the company’s significant future revenue and earnings potential, resulting in an overly-pessimistic valuation.”
The letter concludes: “Based on our most conservative analysis of the proposed sale, H&F’s implied purchase price is only 12.9x the underlying earnings power of the current and immediately planned store base for fiscal year 2023. This valuation seems to assume something that is quite implausible: The store base only grows to 250 (the average planned for fiscal year 2023) without any subsequent growth, and all gains across At Home’s operations and competitive position between fiscal year 2019 and Q1 fiscal year 2022 reverse by fiscal year 2023.”
Under the terms of the current agreement, H&F will commence a tender offer to acquire all outstanding shares of At Home’s common stock. The At Home board of directors unanimously approved the amended agreement and recommends that all At Home stockholders tender their shares in support of the transaction once launched.
The new offer delivers a premium of approximately 21% to the company’s closing stock price of $30.67 on May 4, the last trading day prior to media speculation regarding a possible transaction, and a premium of approximately 28% to the 30-day volume weighted average share price.
On June 15, At Home Group announced the expiration of the 40-day “go-shop” period under the terms of the prior merger agreement, which resulted in no new offers for the company.
Under the terms of the revised agreement, H&F will commence the tender offer on or before today. The consummation of the tender offer will be conditioned on a majority of the outstanding At Home shares being tendered in the offer, together with other conditions consistent with those set forth in the original merger agreement.
Following completion of the tender offer, H&F will complete a second-step merger in which any remaining shares of At Home will be converted into the right to receive the same per share price paid in the tender offer. Upon completion of the merger, At Home will become a private company, and shares of At Home common stock will no longer be listed on any public market.
Goldman Sachs & Co. LLC is serving as exclusive financial advisor, and Fried, Frank, Harris, Shriver & Jacobson LLP as legal counsel to At Home’s special committee of the board of directors. Guggenheim Securities, LLC is serving as financial advisor, and Simpson Thacher & Bartlett LLP as legal counsel to Hellman & Friedman.
"current" - Google News
June 23, 2021 at 08:42PM
https://ift.tt/3qjNsW9
At Home's largest shareholder urges board to reject current offer - Furniture Today
"current" - Google News
https://ift.tt/3b2HZto
https://ift.tt/3c3RoCk
Bagikan Berita Ini
0 Response to "At Home's largest shareholder urges board to reject current offer - Furniture Today"
Post a Comment