USG opens negotiation talks with Knauf
USG Corporation said that it has entered into negotiations for a potential sale of the company to Gebr. Knauf KG (Knauf).
The Chicago-based manufacturer of Sheetrock previously declined an acquisition proposal from Knauf but in a prepared statement, USG’s board said it “remains committed to acting in the best interests of all shareholders and will evaluate all options to do so. USG has advised Knauf that it is prepared to agree to a customary confidentiality agreement to facilitate sharing appropriate due diligence information.”
Two months ago, Knauf proposed a $5.9 billion bid to buy USG with an offer of $42 per share. After being rejected by USG, Knauf then told shareholders to vote against board members standing for election this month.
Shares of USG closed at $40.23 on April 30 and were trading at nearly $42 per share on May 1. USG has argued that the offer is not enough and does recognize the full value of the company.
Warren Buffet and his Berkshire Hathaway company, USG’s largest shareholder behind Knauf, recently sided with the German company and announced that they would also vote against four board nominees standing for election. Berkshire Hathaway owns a 31% share of the company.
“The Board believes that by entering into negotiations and exchanging certain information, Knauf should be able to identify additional sources of value in combining the businesses and will see value in excess of its most recent proposal,” USG said in a statement issued today.
“There can be no assurance that the negotiation process will result in any transaction, or any assurance as to its outcome or timing. The Company has not set a timetable for completion of negotiations and does not intend to disclose developments related to the process unless and until definitive agreements are reached or negotiations are abandoned,” the company said.
In response to USG entering into actual negotiations, Knauf said, “We are encouraged that the USG Board has authorized management to enter into discussions regarding our $42 per share cash offer. Based on what we know at this time, we continue to believe that our offer reflects full and fair value relative to intrinsic long-term sustainable value through the cycle.”
Gebr. Knauf KG is the parent company of the German based Knauf Group. Knauf manufactures building materials and operates more than 220 factories worldwide. In 2017, Knauf has sales of nearly 7 billion Euros (US$8.4 billion).
The Chicago-based manufacturer of Sheetrock previously declined an acquisition proposal from Knauf but in a prepared statement, USG’s board said it “remains committed to acting in the best interests of all shareholders and will evaluate all options to do so. USG has advised Knauf that it is prepared to agree to a customary confidentiality agreement to facilitate sharing appropriate due diligence information.”
Two months ago, Knauf proposed a $5.9 billion bid to buy USG with an offer of $42 per share. After being rejected by USG, Knauf then told shareholders to vote against board members standing for election this month.
Shares of USG closed at $40.23 on April 30 and were trading at nearly $42 per share on May 1. USG has argued that the offer is not enough and does recognize the full value of the company.
Warren Buffet and his Berkshire Hathaway company, USG’s largest shareholder behind Knauf, recently sided with the German company and announced that they would also vote against four board nominees standing for election. Berkshire Hathaway owns a 31% share of the company.
“The Board believes that by entering into negotiations and exchanging certain information, Knauf should be able to identify additional sources of value in combining the businesses and will see value in excess of its most recent proposal,” USG said in a statement issued today.
“There can be no assurance that the negotiation process will result in any transaction, or any assurance as to its outcome or timing. The Company has not set a timetable for completion of negotiations and does not intend to disclose developments related to the process unless and until definitive agreements are reached or negotiations are abandoned,” the company said.
In response to USG entering into actual negotiations, Knauf said, “We are encouraged that the USG Board has authorized management to enter into discussions regarding our $42 per share cash offer. Based on what we know at this time, we continue to believe that our offer reflects full and fair value relative to intrinsic long-term sustainable value through the cycle.”
Gebr. Knauf KG is the parent company of the German based Knauf Group. Knauf manufactures building materials and operates more than 220 factories worldwide. In 2017, Knauf has sales of nearly 7 billion Euros (US$8.4 billion).