Magnetek Rejects Purchase Offer

Menomonee Falls-based Magnetek recently rejected a purchase offer from a New York investment firm Blott Asset Management LLC and Talanta Investment Group LLC to buy the company.

According to JSOnline, the shareholders groups collectively hold about 4 percent of the company’s stock and believed the shares were undervalued when other stocks are reaching all-time highs. They felt a sale would help the company resolve its underfunded pension problem, Thomas Content of JSOnline reports.

However, Magnatek’s board of directors rejected the offer. According to a statement from the company published on BizTimes:

"While it is the fiduciary duty of the board to review credible offers, the board unanimously concluded that Magnetek's business and strategic plans and long-term prospects as a stand-alone company would support a substantially better return to our stockholders than that represented by this expression of interest," said Mitchell Quain, Magnetek's chairman of the board. "As presented to the board, the expression of interest refers only to a 'price in the range of $15.00 per share', which is less than a $1.00 premium to the $14.05 closing price of Magnetek's common stock on April 2, 2013. Furthermore, the expression of interest appears to be based on a number of conditions and speculative assumptions including that a number of members of management and large stockholders would exchange their Magnetek common stock for shares in a newly formed company rather than receiving cash. We believe that pursuing this highly conditional expression of interest would distract us from achieving our business objectives and building the long-term value of the Company."