After more than six months, Industrias Romi is ending its takeover pursuit of Hardinge Inc. When the Brazilian machine tool builder’s $10/share cash-tender offer expired on July 14, it had assembled 5,726,020 outstanding shares of Hardinge — which Romi emphasized represents over 49% of the shares not owned by Hardinge insiders. However, it was not enough to win a controlling stake in the rival company.
"We are disappointed that Hardinge's board and management were unwilling to engage in any dialogue to explore the merits and potential terms of a transaction, despite the positive reception this transaction received from Hardinge shareholders," Romi CEO Livaldo Aguiar dos Santos stated.
"While we continue to believe a combination makes sense, we are disciplined bidders who take our responsibilities to our shareholders seriously,” dos Santos continued. “We remain committed to driving value for our shareholders and maintaining our leadership position in the machine tools industry. Romi will now focus on other alternatives in order to continue executing our plans for strategic growth."
Romi’s pursuit of Hardinge began in October 2009, but it never succeeded at drawing the Hardinge directors into merger discussions. Finally, in March, Romi launched an $8/share cash-tender offer, later increasing that offer to $10/share, and twice extending that offer which it emphasized represented a 105% premium on Hardinge’s December 14, 2009 share price (the date Romi made its first formal proposal to Hardinge.)
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.
"We are pleased to be able to move past the distraction of Romi's takeover bid and keep our focus on the business of building value for our shareholders," commented Hardinge non-executive chairman Kyle H. Seymour.
"The industrial sector and the machine tool industry are beginning to see signs of a recovery, as evidenced by our own strong order rates and improved outlook,” according to president and CEO Richard L. Simons. “Hardinge is well positioned to benefit strongly from that recovery. With our streamlined operating structure, increased cash flow generation, permanent cost reductions, and balance sheet strength, we believe we are poised to outperform our peers as the market continues to improve."