Steel services company Ryerson Inc. says it really was shopped around.
In the latest step in a proxy fight with hedge fund Harbinger Capital Partners, Ryerson defended its $1.06 billion sale to Platinum Equity, saying it exhausted the list of possible buyers for the company. Platinum Equity’s $34.50 per share offer – which came in almost 50 cents per share below where its stock price was trading – is the best it could do, it said in a proxy filing.
Harbinger, which is disappointed with the price, is pushing forward with a proxy campaign to elect new board members at the company’s Aug. 23 shareholder meeting so that it can reevaluate the Platinum deal. It has not said that it will reject it, but that is one possibility.
But Ryerson argues that the auction for the company was run the way it should be and that the price was the highest out there. It received 3 bids after contacting 55 parties, the company said. Here are some of Ryerson’s numbers:
* The Ryerson board met 30 times between January 10 and July 24
* 55 parties were contacted as part of a broad auction process run by UBS including 23 mills, 6 service centers, and 26 private equity firms
* 20 possible buyers signed confidentiality agreements
* 8 put forth indications of interest
* 3 conditional bids, including Platinum, were made
* 2 additional parties expressed interest in July
* Management conducted presentations to six interested parties.
In any case, that $34.50 offer is now higher than Ryerson shares. They have fallen 9 percent since the deal was announced to $31.80 per share on Wednesday afternoon.