Interep says no to buyout bid
"We're willing to talk to anybody," says Interep CEO Ralph Guild, but he and the company's board of directors are not accepting the 1.10 per share buyout bid by Oaktree Capital. Guild notes that Interep's 100 million in bonds have been out for more than seven years and the company has never missed a payment - - and that Interep will have no problem making the twice annual payments of five million bucks to Oaktree and other bondholders. "We have more than enough money to do that," Guild noted.
"There's more to a contract than the price," Guild said when RBR/TVBR asked why the Interep board had backed away after signing the letter of intent for Oaktree's bid of 1.10 per share. "And there are other conditions that they are demanding that we're not willing to meet," Guild continued. Just what those conditions were he declined to say. He also declined to comment on what price tag would be acceptable, but noted that Interep has retained an appraisal firm to value the company for the board. "That is the value. That doesn't mean that we're willing to sell it for that," Guild added. Interep is still talking to other parties about making equity investments in the company, but Guild noted that, unlike Oaktree, the other firms prefer to keep their talks private.
Read Interep's official response to Oaktree's latest letter.
Today Interep responded to Oaktree Capital Management regarding Interep's good faith in following the parties' November 10, 2005 Letter of Intent.
The Letter of Intent obligated Interep to negotiate with Oaktree Capital Management in good faith, not to accept an unsatisfactory deal. Since the Letter of Intent is non-binding, Interep has the right and the obligation to look at possible alternatives to Oaktree's deal.
Despite Oaktree's statements to the contrary, Interep and its Board of Directors have acted in good faith throughout their negotiations with Oaktree. Over the past four months, Interep has been confronted by significant issues relating to the terms and conditions of the transaction, many raised by Oaktree itself. Some of these issues have not been resolved.
The Board's duty is to act in the best interests of all of Interep's shareholders -- and it has done so. While Oaktree's offer of $1.10 per share does represent a premium over the current market share price, the Board will continue to evaluate the intrinsic value of the company with a view to determine a fair valuation. This requires the Board to continue to explore alternatives that could result in greater value for the company's shareholders and employees.
For these reasons and others, Oaktree's claim -- that a failure to do a deal with them will result in irreparable harm to Interep's shareholders -- is simply untrue. The Board believes that it has carried out its fiduciary duties to the shareholders and that Oaktree does not have valid claims against the Board or the Company.
Good Morning - Gain a personal edge on today's business day. Are you reading this from a forwarded email?
