Streeter, Banta Say No to Burton Offer
“At no time did your advisors mention any of the economic terms or conditions stated in the hostile, public overture...We find your actions to be inexplicable,” she also wrote.
Streeter added that Banta’s board would review Burton’s letter of interest with its financial and legal advisors, and offer a response in short order. A week later, the answer was no.
Even if viewed as an attempt to catch Banta off balance and put Streeter on the defensive, Burton’s quest has some industry observers wondering whether the Banta chief exec will ultimately maintain support of the board.
“Burton’s record is such that this (acquisition) will happen. He just saw great timing,” said one source, speaking on the condition of anonymity.
The offer came only days after Banta’s dismal quarterly report, when it announced a reorganization of its print sector in order to cut costs and provide long-term stability.
Banta’s second quarter earnings plummeted from $33.8 million in the second quarter of 2005 to $16.1 million in 2006. The sale of its healthcare business fueled its 2005 performance.
Streeter said the company was reorganizing its five print divisions into two divisions, thus eliminating management infrastructure while reducing general and administrative costs.
Its book, publications and consumer catalog divisions will now be called Banta Publishing & Catalog Solutions. Its direct marketing and literature management divisions will be meshed under the heading Banta Direct Marketing Solutions. The Print Sector reorganization is expected to generate annualized pre-tax savings of approximately $3 million, beginning in 2007.
While there appears to be little overlap between the two companies, one senior printing executive familiar with the situation believes Burton’s interest has little to do with meshing their products and services.
“This doesn’t appear to be a synergy-driven play between Cenveo and Banta as much as it does a view that Banta has a high cost structure in the midst of facing some major business issues,” he said. “With or without Cenveo as the vehicle to pursue Banta, it seems that Banta’s situation is one that would have naturally attracted Bob Burton’s interest.”