The investment group that wants to buy the 45% of BlueLinx that it doesn't own already warned in an SEC filing today that it will kill its offer unless a special committee of the BlueLinx board recommends that shareholders accept the investment group's terms.
Cerberus ABP Investor LLC (CAI) and Ceberus Capital Management L.P. added the condition one week after the special committee notified BlueLinx's board that it hadn't been able up to that point to decide how to respond to Cerberus' $49.6 million offer. CAI already owns 55% of BlueLinx and offered on July 21 to buy the 14.6 million outstanding shares for $3.40 each.
In response to the special committee's indecisiveness, CAI announced Aug. 13 that it was extending the deadline for its tender offer to midnight ET Friday, Sept. 3, from the same time on Aug. 27. (Story). Today's move presumably increases the pressure on BlueLinx to act.
The new language declares that besides conditions previously set, Cerberus " will not be required to and will not accept for payment any tendered shares, and may amend or terminate the offer, if the Special Committee shall have failed to amend its 'Solicitation/Recommendation Statement' on Schedule 14D?9 to affirmatively recommend the offer, or the ffer as amended, or shall have subsequently withdrawn or amended or modified in any manner adverse to [Cerberus]
The Special Committee Recommendation Condition is not waivable," Cerberus warned.
The amended offer also adds Cerberus Capital Management to the official list of buyers along with CAI. No reason for the addition was given. Cerberus is one of the biggest investment groups in the United States. Among its recent actions in the building materials sector, it was revealed earlier this week that the company loaned 84 Lumber $195 million at 18% interest two years ago. That loan has since been paid down to $55 million, and 84 now is pursuing alternative financing to extinguish most or all of the remainder. (Story)
BlueLinx provides products from more than 750 suppliers to 11,500 customers nationwide. It reported on Aug. 5 a net loss of $3.4 million for the second quarter, swinging from a year-earlier profit of $600,000. That loss occurred despite a 27.7% increase in revenues to $540.8 million.