Blackfriars To Offer To Buy Emco Ltd.
Emco Limited, a Canadian distributor and manufacturer of building products based in London, Ontario, entered into a Support Agreement on Feb. 20 with Blackfriars Corp., a privately held investment company with major interests in the manufacture and wholesale distribution of construction and maintenance material, and 2022841 Ontario Inc., a wholly owned subsidiary of Blackfriars. Pursuant to this agreement, 2022841 Ontario Inc. would make an offer to purchase all of the issued and outstanding common shares of Emco at a price of $11.04 (U.S.) per share in cash (for an aggregate value of about $189.5 million U.S.). The offer was expected to be mailed to shareholders shortly thereafter and be subject to customary conditions, including that at least 66-2/3% of the Emco common shares are tendered and that all necessary regulatory approvals are obtained.
Emco's board expressed unanimous support of the offer and recommended that shareholders accept it.
At the request of the Independent Committee of Emco's board, Masco Corp., which holds about 42% of the issued and outstanding common shares of Emco, entered into an agreement with Blackfriars pursuant to which it agreed to tender its shares.
The offer resulted from a strategic alternatives review initiated by Emco's board last July. It represents a 12.5% premium over Emco's closing share price of $9.81 (U.S.) on the Toronto Stock Exchange on Feb. 19, 2003, and a 58% premium over Emco's closing share price of $6.98 (U.S.) on July 23, 2002, the day prior to the announcement of the strategic alternatives review.
"This transaction will give Emco the strong sponsorship of Blackfriars Corp., a well respected investment company in the United States, and provides Emco with the opportunity to continue our strong relationships with our employees, customers and suppliers," Douglas E. Speers, Emco's president/CEO, said in a statement.