Industrias Romi S.A. is extending until July 14 its $10/share cash-tender offer for outstanding shares of Hardinge Inc. It’s the second extension of the takeover attempt, which was previously extended from May 28 to June 18. At close of business that day, Romi reported it had assembled 48% of Hardinge’s outstanding shares, calling that “a significant increase in support from shareholders.”
"We are very encouraged by the increasing support from Hardinge shareholders even though the terms of our offer remain unchanged," stated Romi CEO Livaldo Aguiar dos Santos. "Hardinge recently disclosed that competition has impacted margins and that it was lowering sales guidance for the second quarter of 2010, partly as a result of failures in supply chain management. This has reinforced our belief – and the beliefs of many Hardinge shareholders – that our all-cash offer is the best alternative available to Hardinge, offering shareholders immediate liquidity at a superior value to the Company's stand-alone prospects.
Romi’s pursuit of Hardinge began last fall, but it failed to convince the Hardinge directors to engage in merger discussions. Finally, in March, Romi launched an $8/share cash-tender offer, later increasing that offer to $10/share and extending it for six weeks.
Romi manufactures machine tools, plastic injection, and blow molding machines, and also produces component parts made of gray and ductile iron. Throughout the process it has argued that combining its assets with those of Hardinge will form an organization that is better suited to compete in the global machine tool market.
Hardinge, of Elmira, NY, produces vertical and horizontal machining centers, CNC lathes, grinding tools, and workholding equipment. Its brands include the Hardinge, Kellenberger, Bridgeport, Hauser, and Tschudin product lines.
In response to the latest extension, Hardinge stated: “Hardinge’s board of directors remains unanimous in its belief that Romi’s hostile low-ball bid is an opportunistic attempt to transfer the value of Hardinge to Romi at a highly inadequate price and is not in the best interests of the company or its shareholders. With its extension for a second consecutive time of its 'best and final' $10.00 per share offer, even though the number of shares tendered remains well below the 66.6% minimum condition that Romi requires, it is clear that Romi is not serious about a transaction that does anything but secure for itself upside that rightly belongs to Hardinge shareholders.”