Friday, December 16, 2005
BELL INDUSTRIES OFFERS TO BUY THE COAST DISTRIBUTION SYSTEM
Technology company Bell Industries Inc. on Thursday reaffirmed its interest in taking over Coast Distribution System Inc., a supplier of parts for recreational vehicles and boats, while questioning whether Coast is playing it straight with shareholders on the offer.
Bell, which provides network engineering, software development and training services, also raised its offer to acquire Coast Distribution to $7.70 per share in cash, up from its initial bid of $7.16 per share. The new offer represents a 15 percent premium over Coast's average closing price over the past month of $6.69 per share.
All told, Bell is offering to pay roughly $34 million in cash and assume $16 million of debt, a spokesman said.
In a publicly released letter to Coast's board, Bell said it has yet to receive a formal response from Coast.
Meanwhile, Coast, which is based in Morgan Hill, Calif., announced earlier this month that its board had authorized it to repurchase up to an added $1.2 million of its shares from investors. Shares of the company have since gained 12 percent. The stock recently fell 15 cents or 2 percent, to $7.21 on the American Stock Exchange.
Bell said Thursday that the timing of Coast's announcement of its buyback plan "is curious and troublesome."
"We consequently raise the question of whether or not Coast is seeking to protect the interests of all of its shareholders and maximize value by offering to buy additional shares of stock at a time when it has neither informed its shareholders of our proposal nor formally responded to our offer," Bell said.
A spokesperson for Coast couldn't immediately be reached.
Bell shares fell 10 cents, or 3.7 percent, to $2.60 in afternoon trading on the American Stock Exchange.
Bell, which provides network engineering, software development and training services, also raised its offer to acquire Coast Distribution to $7.70 per share in cash, up from its initial bid of $7.16 per share. The new offer represents a 15 percent premium over Coast's average closing price over the past month of $6.69 per share.
All told, Bell is offering to pay roughly $34 million in cash and assume $16 million of debt, a spokesman said.
In a publicly released letter to Coast's board, Bell said it has yet to receive a formal response from Coast.
Meanwhile, Coast, which is based in Morgan Hill, Calif., announced earlier this month that its board had authorized it to repurchase up to an added $1.2 million of its shares from investors. Shares of the company have since gained 12 percent. The stock recently fell 15 cents or 2 percent, to $7.21 on the American Stock Exchange.
Bell said Thursday that the timing of Coast's announcement of its buyback plan "is curious and troublesome."
"We consequently raise the question of whether or not Coast is seeking to protect the interests of all of its shareholders and maximize value by offering to buy additional shares of stock at a time when it has neither informed its shareholders of our proposal nor formally responded to our offer," Bell said.
A spokesperson for Coast couldn't immediately be reached.
Bell shares fell 10 cents, or 3.7 percent, to $2.60 in afternoon trading on the American Stock Exchange.
