HC2 Holdings Offers To Acquire The Andersons At 43% Premium

HC2 Holdings Inc HCHC, a diversified holding company run by ex-hedge fund manager Philip Falcone, delivered a public letter to the agricultural company Andersons Inc ANDE which contained a buyout offer.

In HC2 Holdings' letter, Falcone stated he has repeatedly expressed interest in the company since at least April 18 when a meeting with held. At that time, Falcone offered to acquire the company for $37 per share - an offer that was ultimately rejected.

Falcone added that since the meeting, Andersons' management has not engaged in discussions and disclosed what it believed to be an acceptable takeover price. As such, the holding company decided to go public and make shareholders aware of the buyout proposal.

"As we explained in our letters and meeting, we believe the Company has been poorly managed and has not been effective in extracting synergies of any significance from the five disparate corporate entities it owns, controls and operates," Falcone wrote.

Falcone cited Anderson's "bloated" corporate overhead expense structure, a "poor" operating performance, "weak" earnings and a stock that is "dramatically" underperforming its peers.

Alternatively, Falcone offered to acquire from Andersons two of its corporate entities - the Grain Group and the Rail Group for $950 million.

"When presented with either of our proposals, which are unanimously supported by our Board, we are confident that the Company's shareholders will embrace it," the letter concluded. "HC2 is uniquely positioned to quickly evaluate and finalize this transaction, allowing your shareholders to receive immediate and certain value. Although, as we have indicated repeatedly that we would have preferred to negotiate a transaction with the Company, we have determined that making your shareholders aware of our proposals, particularly our all-cash proposal, is now necessary given the Company's attempts to delay constructive engagement."