Banta Rejects Cenveo Offer (posted 10/3)
Without ruling out the possibility of a future merger or sale, Banta Corporation’s Board of Directors has unanimously rejected Stamford, Connecticut-based Cenveo Inc.’s unsolicited proposal to acquire Banta for $47 per share, the company announced today.
According to a statement from Banta, the Board of Directors believes the proposal is not in the best interests of the company’s shareholders or its other constituents. The company goes on to say that after consulting with its financial advisor, UBS Investment Bank, it has decided to explore all potential strategies for maximizing shareholder value, including remaining independent, joint ventures, mergers, acquisitions, further return of capital, or the sale of the company.
“While the board and management continue to have complete confidence in Banta’s current long-term strategy and believe Banta is well positioned to thrive as an independent company, the board remains committed to continuing to seek opportunities to further enhance value for all Banta shareholders,” said Banta CEO Stephanie Streeter in a statement. “Consistent with that commitment and its fiduciary obligations, the board believes it is an appropriate time to undertake a comprehensive process to identify and study all of the value- creating options available to the company.”
Cenveo, a maker of envelopes and provider of digital printing services, has yet to respond to Banta’s rejection. But Monday, Cenveo Chairman and CEO Robert G. Burton told his company’s shareholders that Cenveo remains “committed” to completing the Banta acquisition. “I believe that our proposal is in the best interests of both companies’ respective shareholders and will create a dynamic print powerhouse better able to serve the needs of our customers,” he said.
Burton said the company is also evaluating other acquisition opportunities. “As I have previously stated, we will continue to look to grow the company both organically and through thoughtful, strategic acquisitions of quality companies in higher growth sectors of the printing marketplace,” he added.
Last month, Menasha, Wisconsin-based Banta announced in a SEC filing that it is eliminating 500 jobs, reorganizing to consolidate its five printing divisions into two, and planning to either sell or close five of its printing facilities that are not meeting profitability expectations or can be consolidated into other Banta operations.
In the same SEC document, it said its board had approved payment of a special cash dividend of $16 per share and that it will borrow money to the pay the special dividend. The consolidation of its operations and special dividend are viewed by analysts as a means of boosting shareholder value in the company in light of the Cenveo bid.
In today’s announcement, Banta said the Cenveo bid has automatically triggered the requirement, adopted by the company’s board in 1990, to fund a trust, which will hold restricted cash assets available to cover payments, both immediate and long- term, due to “certain retired and active Banta employees.” The payments include deferred compensation and retirement benefits already earned by employees, and potential compensation and benefits. The company will use about $100 million to fund the trust, which will revert back to Banta if a “change in control” of the company does not occur.