USG acquisition battle heats up
Gebr. Knauf KG (Knauf), the German company with aspirations of acquiring USG Corporation has ramped up its efforts.
Knauf issued a letter to USG shareholders urging them to vote against all four director nominees up for election to the USG Board of Directors at the Chicago-based building manufactuer’s annual stockholders meeting on May 9.
Last month USG’s board rejected an acquisition proposal from Knauf valued at $5.9 billion. On March 15, Knauf – USG’s second-largest shareholder – offered $42 per share in cash for the Chicago-based manufacturer of Sheetrock. USG’s largest shareholder is Warren Buffet’s Berkshire Hathaway.
“We believe that $42.00 presents you with immediate, substantial and cash-certain value for your investment. The USG Board of Directors formally rejected our offer without engaging in meaningful discussions beyond reiterating the points made at USG's Investor Day and in previous communications,” reads the letter sent to USG shareholders.
Based in Iphofen, Germany, Knauf manufactures building materials and operates 220 factories worldwide. The company has invested heavily in USG since 2000.
Shares of USG closed at $39.67 on April 9 and has seen its largest growth since the emergence of a possible acquisition. On March 23, USG shares closed $33.52 but shot up as high as $41 once Knauf’s intentions were revealed.
“As we have stated in our communications, $42.00 per share reflects what we believe to be the full and fair value relative to intrinsic long-term sustainable value through the cycle. Our offer gives USG shareholders substantial value for their investment now, and de-risks any future business plan execution and cyclicality,” Knauf said in its letter.
USG has countered, however, and said the price Knauf is offering “significantly undervalues the company and is not in the best interests of all USG shareholders.”
Additionally, in a statement issued this afternoon, USG said it has in fact had discussions with Knauf in the past.
Steven Leer, USG's non-executive chairman of the Board, said, "Knauf's letter mischaracterizes our board's actions. Our board has clearly demonstrated that it is willing to evaluate any opportunity to deliver value to all of our shareholders. We have engaged with Knauf in good faith on multiple occasions since November 2017.”
Jennifer Scanlon, president and CEO of USG, said, "Contrary to Knauf's statements, I have met with and spoken to Knauf's senior management multiple times in the past few months. Knauf knows this industry well and understands that USG, with our Sheetrock brand, is the crown jewel within North American building products, and to date has not indicated any willingness to pay full value to all of our shareholders."
Knauf issued a letter to USG shareholders urging them to vote against all four director nominees up for election to the USG Board of Directors at the Chicago-based building manufactuer’s annual stockholders meeting on May 9.
Last month USG’s board rejected an acquisition proposal from Knauf valued at $5.9 billion. On March 15, Knauf – USG’s second-largest shareholder – offered $42 per share in cash for the Chicago-based manufacturer of Sheetrock. USG’s largest shareholder is Warren Buffet’s Berkshire Hathaway.
“We believe that $42.00 presents you with immediate, substantial and cash-certain value for your investment. The USG Board of Directors formally rejected our offer without engaging in meaningful discussions beyond reiterating the points made at USG's Investor Day and in previous communications,” reads the letter sent to USG shareholders.
Based in Iphofen, Germany, Knauf manufactures building materials and operates 220 factories worldwide. The company has invested heavily in USG since 2000.
Shares of USG closed at $39.67 on April 9 and has seen its largest growth since the emergence of a possible acquisition. On March 23, USG shares closed $33.52 but shot up as high as $41 once Knauf’s intentions were revealed.
“As we have stated in our communications, $42.00 per share reflects what we believe to be the full and fair value relative to intrinsic long-term sustainable value through the cycle. Our offer gives USG shareholders substantial value for their investment now, and de-risks any future business plan execution and cyclicality,” Knauf said in its letter.
USG has countered, however, and said the price Knauf is offering “significantly undervalues the company and is not in the best interests of all USG shareholders.”
Additionally, in a statement issued this afternoon, USG said it has in fact had discussions with Knauf in the past.
Steven Leer, USG's non-executive chairman of the Board, said, "Knauf's letter mischaracterizes our board's actions. Our board has clearly demonstrated that it is willing to evaluate any opportunity to deliver value to all of our shareholders. We have engaged with Knauf in good faith on multiple occasions since November 2017.”
Jennifer Scanlon, president and CEO of USG, said, "Contrary to Knauf's statements, I have met with and spoken to Knauf's senior management multiple times in the past few months. Knauf knows this industry well and understands that USG, with our Sheetrock brand, is the crown jewel within North American building products, and to date has not indicated any willingness to pay full value to all of our shareholders."