In a letter to Vulcan’s board yesterday, Martin Marietta said the proposed combination is a “compelling value-enhancing opportunity.” It made the letter public in a statement sent through Business Wire.
Martin Marietta announced a hostile takeover for Vulcan in an all-stock transaction valued on Dec. 12 at about $4.7 billion. The offer is being made directly to investors after Vulcan, the largest U.S. producer of crushed stone, broke off talks on a combination, Martin Marietta has said.
“Statements in Vulcan’s New Jersey court papers that our proposal is an attempt ‘to snatch Vulcan for the lowest possible price,” are “simply inaccurate,” Martin Marietta Chief Executive Officer Ward Nye wrote in the letter.
Martin Marietta is seeking a court order declaring that only a simple majority vote is required to approve a merger, according to Vulcan’s filing yesterday.
Douglas Eakeley, a lawyer for Vulcan, confirmed the filing by the company. The filing couldn’t be independently confirmed with the court.
Reviewing the Offer
Nye, in his letter, said he was concerned the papers imply the transaction has been rejected, even though Vulcan’s board hasn’t publicly stated its position on the proposal. Vulcan said in a Dec. 12 statement that its board is reviewing the offer and will make a recommendation to shareholders within 10 working days.
Mark Semer, an outside spokesman for Martin Marietta at Kekst & Co. in New York, didn’t return a voice-mail message seeking comment on the filing and statement. Meghan Stafford, an outside spokeswoman for Vulcan, declined to comment.
Martin Marietta has also sued Vulcan in Delaware Chancery Court in Wilmington. It asked a judge in its Dec. 12 complaint to declare that a May 3, 2010, non-disclosure agreement between the two “does not prohibit Martin Marietta’s public offer to purchase all issued and outstanding shares of Vulcan’s common stock in exchange for Martin Marietta’s stock.”
That suit also seeks a ruling that allows Vulcan stockholders “to vote for the election of Martin Marietta’s five independent nominees” to Vulcan’s board.
The combined companies would create the world’s largest aggregates supplier. Robert Wetenhall, an analyst with RBC Capital Markets in New York, told Bloomberg News on Dec. 12 that Vulcan has the “best portfolio” of reserves in North America.
Martin Marietta, the second-largest producer of crushed stone, gravel and sand in the U.S., is offering 0.5 shares for each share of Birmingham, Alabama-based Vulcan. Martin Marietta is based in Raleigh, North Carolina.
The offer follows losses for Vulcan in three of the past four quarters amid a U.S. construction recession.
The bid was a 15 percent premium to the average exchange ratio based on the closing share prices for Vulcan and Martin Marietta for the 10 days ended Dec. 9, Martin Marietta said.
On Dec. 16, Martin Marietta rose 1.3 percent to $74.44. Vulcan’s shares climbed 0.3 percent to $38.78, which is 4.2 percent higher than 0.5 percent of Martin Marietta’s closing price of $74.44.