BlueLinx Holdings Inc. has named its three independent board members to a special committee that will examine the offer by a Cerberus Capital Management unit to buy the 45% of BlueLinx that it doesn't already own, the distributor announced today.
The special committee members--Richard B. Marchese, Alan H. Schumacher, and Richard S. Grant--have been working since July 22, the day that Cerberus ABP Investor filed its tender offer to acquire all outstanding stock, paying $3.40 per share. BlueLinx shares, which had been selling at $2.51 before Cerberus' announcement, jumped to $3.66 by the close of trading on July 22. As of this morning, they were at $3.86
The committee retained Jones Day as legal counsel and Citadel Securities LLC as financial adviser, BlueLinx said. At least 13 law firms already have announced they plan to investigate the tender offer and were soliciting shareholders who disliked it.
"We believe that our offer to acquire the shares of BlueLinx not owned by [Cerberus] represents a unique opportunity for BlueLinx's stockholders to realize the value of their shares at a significant premium to BlueLinx's current and recent stock price," officials for Cerberus unit Cerberus ABP Investor LLC (CAI) wrote in a letter sent to the BlueLinx board on July 21. "... In considering our tender offer, you should be aware that in our capacity as a stockholder we are interested only in acquiring the BlueLinx shares not already owned by us and that in our capacity as a stockholder we have no current interest in selling our stake in BlueLinx nor would we currently expect, in our capacity as a stockholder, to vote in favor of any alternative sale, merger or similar transaction involving BlueLinx other than the transaction outlined here."
Atlanta-based BlueLinx, which provides products from more than 750 suppliers to 11,500 customers nationwide, reported May 6 that its net loss shrank to $14.7 million in its fiscal first quarter ended April 3 from a $60.7 million net loss in the year-earlier period. Revenues rose 6% to $431.1 million--the first such year-over-year increase in four years--while overall unit volume increased by 1.4% from 2009's fiscal first quarter.