Directors of Hardinge Inc. unanimously recommend that shareholders reject Industrias Romi’s $10/share cash tender offer, calling it “highly inadequate, opportunistic, and not in the best interests of Hardinge and its shareholders.”
Romi’s efforts to consolidate the two machine tool building groups has been in progress for over six months, but the appeal to shareholders began in late March. The Brazilian group approached the Hardinge board with its merger proposal in October 2009, but all attempts at negotiating a deal have been rejected. Romi argues that combining its assets with those of Hardinge will form an organization that is more suited to compete in the global machine tool market.
On May 10, Romi raised its cash-tender proposal from $8/share to $10/ share, and called it a final offer. "Although we remain a disciplined bidder, in raising our offer we have taken into account the views of Hardinge's shareholders and our goal of completing a transaction that makes strategic sense for both companies as soon as possible,” stated Romi CEO Livaldo Aguiar dos Santos.
Kyle H. Seymour, non-executive chairman of Hardinge, said, "We have carefully reviewed this new offer and believe that it is still highly inadequate and opportunistic, and not in the best interests of Hardinge and its shareholders. We continue to believe the ongoing implementation of Hardinge's strategic plan will deliver significant value to our shareholders. We have never hidden from Romi our views on Hardinge's valuation and prospects and in our view their 'best and final' $10.00 offer does not reflect full and fair value for Hardinge."
Hardinge president and CEO Richard L. Simons, added: "The industrial sector and the machine tool industry is beginning to see signs of a recovery, as evidenced by our own strong order rates and improved outlook. As we have said previously, Hardinge is well positioned to benefit from a recovery, and with our streamlined operating structure, we are poised to outperform our peers as the market continues to improve. Hardinge shareholders recognize the significant upside potential inherent in our business plan and operations. If Romi is serious that $10.00 is its 'best and final' price, both companies should be able to move past the distraction of this bid and get on with the business of building value for our respective shareholders."
Romi manufactures machine tools, plastic injection, and blow molding machines, and also produces component parts made of gray and ductile iron.
Hardinge, of Elmira, NY, produces vertical and horizontal machining centers, CNC lathes, grinding tools, and workholding equipment. Its brands include the Hardinge, Kellenberger, Bridgeport, Hauser, and Tschudin product lines.
