Romi Still Seeking Hardinge Shares as Deadline Approaches

July 14, 2010
Machine tool merger said to be best strategy in volatile market

With a second deadline approaching Industrias Romi S.A. is “urging” Hardinge Inc. shareholders to tender their shares in the hope that it can collect enough equity to complete a takeover of the rival machine tool builder. The current $10/share offer expires July 14. "We urge Hardinge shareholders to clearly signal that they want the Hardinge board of directors and management to open negotiations with Romi by tendering into Romi's offer. Importantly, as we have repeatedly stated, our offer is based solely on publicly available information about Hardinge and our in-depth knowledge of the industry,” Romi CEO Livaldo Aguiar dos Santos stated.

The last substantive discussion we had with Hardinge was on December 23, 2009, several months prior to the launch of our tender offer on March 30, 2010. However, if we receive significant support from Hardinge shareholders on Wednesday and if the Hardinge Board and management are willing to help us identify additional value we are not aware of today, we would be prepared to re-evaluate our offer and extend the offer period as part of an agreed transaction," said Livaldo Aguiar dos Santos, Chief Executive Officer of Romi.

On June 18, Romi was understood to have collected 48% of Hardinge’s outstanding shares.

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. In June, it extended the offer again, until July 14.

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.

"Given the ongoing doubts about the timing, strength and reliability of an economic recovery and the volatility in the financial markets, we believe that a business combination with Romi is the best alternative available to Hardinge, including the company's stand-alone prospects," dos Santos explained.