Belden Inc., an American provider of signal transmission solutions for mission-critical applications, has announced that it intends to extend until February 9, 2012 its all-cash offer to acquire Canadian company RuggedCom Inc. for C$22.00 per share.
The extension of Belden’s offer will allow RuggedCom shareholders to know before the offer closes the outcome of an Ontario Securities Commission hearing to be held on February 6, 2012, that will consider Belden’s request for an order to cease trading the shareholder rights plan adopted last month by the Board of Directors of RuggedCom in response to Belden’s offer.
Belden contends that the rights plan constitutes an improper defensive tactic implemented by the Board of Directors of RuggedCom without the approval of RuggedCom shareholders and believes the object and effect of the rights plan is to deprive RuggedCom shareholders of their fundamental right as shareholders to each decide for themselves whether to tender their shares to the offer.
“We are confident that the Ontario Securities Commission will side with RuggedCom shareholders and allow them to make their own decisions about the merits of Belden’s offer,” said Belden President and CEO John Stroup. “We also continue to be confident that RuggedCom shareholders will recognize that our offer is in their best interests and delivers strong and fair value based on the current market outlook.”
Mr. Stroup noted the assessments of credible industry watchers and analysts who have stated that Belden’s offer is generally in line with, if not in excess of, their long-term valuations and price targets for RuggedCom stock.
“It is our strong belief that combining the businesses would deliver significant synergies that will help to better serve the customers of both companies, provide new growth opportunities to RuggedCom and Belden employees and be in the best interests of shareholders of both companies,” said Mr. Stroup.
Announced on December 19, Belden’s offer of C$22.00 per share implies a total purchase price of approximately C$280 million and represents a 62% premium to RuggedCom’s pre-offer closing share price of C$13.61 as of December 16, 2011, as well as an 87% premium to the company’s enterprise value as of that date. The offer is not subject to any financing conditions and provides RuggedCom shareholders with certainty of value and immediate liquidity while removing financing, market, and execution risks to shareholders.
The offer currently expires on January 25, 2012.
Full details of the offer are available in the offer to purchase and take-over bid circular that has been sent to RuggedCom shareholders and filed on SEDAR. The offer and related documents are available at Sedar.