Stewart Enterprises Inc. (STEI), the owner of more than 200 funeral homes and 100 cemeteries in the U.S. and Puerto Rico, advanced the most in more than five years in Nasdaq trading after rejecting a buyout offer from Service Corp. (SCI) International.
Stewart rose $1.24, or 18 percent, to $8.23 at 4 p.m. New York time on the Nasdaq Stock Market, the biggest gain since August 2002. Shares of the Jefferson, Louisiana-based company are down 7.5 percent this year.
Service Corp., which owned more than 1,300 funeral homes and 350 cemeteries as of March 31, offered at least $9.50 a share in cash for Stewart, according to a regulatory filing. Stewart rejected the offer as ``inadequate'' in a letter dated July 7, according to today's filing.
``Current conditions are ideal for a combination of our companies,'' Houston-based Service Corp. wrote in a June 25 letter to Stewart's board included in the filing. The offer could increase to $10.25 to $11.25 a share after access to ``non-public, non-competitively sensitive overhead and trust information,'' Service Corp. said.
``Our board has unanimously concluded that it is in the best interests of Stewart Enterprises and its stockholders to reject your proposal as inadequate,'' Stewart Chief Executive Officer Thomas Crawford wrote in reply.
Service Corp. gained 24 cents, or 2.6 percent, to $9.39 in New York Stock Exchange composite trading. The shares have lost 33 percent this year.
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