Burton Committed to Banta Acquisition
September 2006
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STAMFORD, CT—Refuting the assertion that Cenveo’s bid to acquire Banta was “a highly conditional and ambiguous overture,” Cenveo Chairman and CEO Robert Burton responded by increasing his offer from $46 to $47 per share, or $1.14 billion.
In a letter Tuesday to Stephanie Streeter, Banta chairman, president and CEO, Burton reiterated his belief that a combined company “will maintain a balanced portfolio of print and print-related services enabling it to compete more efficiently in the industry and provide even better service to its customers.”
Burton asked Streeter to meet with him to discuss the purchase. As in past courtships of graphic arts concerns, Burton refuses to discuss the Xs and Os of a master plan for improving the company.
“These meetings end up discussing who keeps their jobs and potential layoffs,” Burton wrote. “I do not plan to meet with you to discuss these matters, where you can then tell me the company is not for sale.”
Addressing some concerns cited in Streeter’s August 18 letter, Burton noted that financial commitments have been made by Lehman Brothers and Wachovia to provide necessary financing to acquire Banta’s outstanding shares in an all-cash transaction. He also assured Streeter that the due diligence required would only be “confirmatory,” and that he has confidence in the accuracy of Banta’s public filings.
Burton feels the $47 a share offer, a 38 percent premium to Banta’s closing price on August 8, is more than fair value for Banta, which saw its stock price spike. “I assume you realize that if we pull our $47 per share proposal, your stock will go back to the mid-to-low $30 range,” he wrote.
Among Burton’s conclusions was the belief that Banta’s $3 million cost savings plan “is a very weak attempt at fixing a large and growing problem. I believe that Banta needs to at least reduce their fixed costs by tens of millions of dollars to be competitive in today’s print environment.”
As of Friday, Banta had not publicly responded to Burton’s letter.
In a letter Tuesday to Stephanie Streeter, Banta chairman, president and CEO, Burton reiterated his belief that a combined company “will maintain a balanced portfolio of print and print-related services enabling it to compete more efficiently in the industry and provide even better service to its customers.”
Burton asked Streeter to meet with him to discuss the purchase. As in past courtships of graphic arts concerns, Burton refuses to discuss the Xs and Os of a master plan for improving the company.
“These meetings end up discussing who keeps their jobs and potential layoffs,” Burton wrote. “I do not plan to meet with you to discuss these matters, where you can then tell me the company is not for sale.”
Addressing some concerns cited in Streeter’s August 18 letter, Burton noted that financial commitments have been made by Lehman Brothers and Wachovia to provide necessary financing to acquire Banta’s outstanding shares in an all-cash transaction. He also assured Streeter that the due diligence required would only be “confirmatory,” and that he has confidence in the accuracy of Banta’s public filings.
Burton feels the $47 a share offer, a 38 percent premium to Banta’s closing price on August 8, is more than fair value for Banta, which saw its stock price spike. “I assume you realize that if we pull our $47 per share proposal, your stock will go back to the mid-to-low $30 range,” he wrote.
Among Burton’s conclusions was the belief that Banta’s $3 million cost savings plan “is a very weak attempt at fixing a large and growing problem. I believe that Banta needs to at least reduce their fixed costs by tens of millions of dollars to be competitive in today’s print environment.”
As of Friday, Banta had not publicly responded to Burton’s letter.
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