Huttig receives takeover offer
St. Louis-based Huttig Building Products received an offer from its largest shareholder to acquire the publicly traded building products distributor.
Mill Road Capital Management, which already owns 8.1% of Huttig’s shares, offered $2.75 per share for all of the remaining shares of HBP. The offer represented a premium of 67% over the company’s Aug. 6 closing price of $1.65. Huttig’s stock price jumped to $2.51 when the news was released on Aug. 7.
In an open letter to Huttig Chairman of the Board of Directors Delbert Tanner, Mill Road Capital’s Justin Jacobs, management committee director, wrote: “Since making our initial investment in Huttig in 2017, we have developed a deep appreciation of the Company and its CEO, Jon Vrabely.”
It went on to express a view that micro-cap stocks like HBP often have difficulty balancing the interests of shareholder return and long-term, strategic business objectives.
Huttig reported sales of $812 million in 2019, down 3.3% from the previous year. It posted a net loss of $21.3 million. Mill Road Capital is based in Geenwich, Conn.