Optical Cable Corp. this week rejected an unsolicited and contingent proposal from Superior Essex, Inc. to purchase all of Optical Cable's outstanding shares of common stock for $6.00 per share.
The proposal was the same as a private proposal from Superior Essex first received by Optical Cable on August 1, 2006, which was considered by Optical Cable's board of directors and rejected.
According to a press release, Optical Cable's board carefully considered and unanimously determined that the private proposal was financially inadequate, and that attempting to negotiate with Superior Essex at the present time is not in the best interests of Optical Cable's shareholders.
"The board views Superior Essex's proposal as grossly inadequate and opportunistic, and has concluded that seeking to negotiate a combination with Superior Essex at this time would be incompatible with, and could in fact interfere with, the course of action we are pursuing," comments Neil Wilkin, president and CEO of Optical Cable. "Optical Cable is in various stages of implementing a number of initiatives expected to improve substantially our strategic position and to provide upside opportunities for Optical Cable and our shareholders. Our board of directors believes, as do I, that Optical Cable's upside opportunities should benefit our current shareholders, not Superior Essex or anyone else."
The acquisition proposal was valued at approximately $36 million, representing a premium of almost 70% over Optical Cable's closing share price on August 14, 2006, the last trading day before the proposal was made public, according to a press release issued by Superior Essex.
"Our board of directors carefully considered the private and unsolicited proposal received from Superior Essex on August 1, which contained the same terms and conditions as set forth in their surprise public announcement [this week]. After careful consideration in consultation with legal and financial advisors, our board unanimously rejected Superior Essex's private proposal," concludes Optical Cable's Wilkin. "Our board and management team are focused on building value for our shareholders through continued execution of the company's business plan. Optical Cable has been rebuilding in recent years, and we believe our shareholders should receive the full benefit of those efforts when complete."
