Metro Performance Glass - Highbrook Business Park Photo: SUPPLIED
A takeover bid for Metro Performance Glass (MPG or Metroglass) from two of its major shareholders has been emphatically rejected.
Vulcan Steel founder Peter Wells and veteran investor Peter Masfen, who collectively owned 25.1 percent of Metroglass, joined forces to acquire all or a substantial part of the company through a scheme of arrangement.
The offer was 18 cents a share compared to MPG's last traded price of 15.7 cents, with conditions that it alone would get a deep look into the company's finances and operations and that any deal was backed by the board of directors.
But Metroglass quickly turned it down because the offer was too low.
"After carefully considering the NBIO (non-binding indicative offer) ... the board of directors of Metroglass has concluded that the proposal significantly undervalues Metroglass and that it is not in the best interests of the company and its shareholders to progress the proposal," the board said in a statement to the stock exchange.
It also disclosed Masfen's investment company had made its own "confidential enquiries" in May about a takeover on much the same terms as the latest joint bid.
Metroglass makes a range of industrial and commercial glass products and double glazing, but has been struggling with a soft construction sector and high debt levels, which have forced job cuts, asset writedowns and a move to sell its Australian operations.
"Metroglass is continuing to progress the Australian Glass Group (AGG) divestment process, and will provide an update on that process in due course."
In May it reported a bigger full year loss of $10.5 million, largely because of a writedown in assets. Leaving aside the one-offs, the company's underlying earnings doubled to $11.8m.
Metroglass shares resumed trading after a halt at the offer price of 18 cents, which valued the company at $33.4m.
The company debuted on the NZX in 2014 at $1.75 and peaked in September 2016 at $2.24. Since then the price has consistently fallen, after it reported earnings below its own and market expectations.
The Metroglass bid is the second takeover bid to be rejected in a week, with transport software company ERoad also rebuffing an offer as being too low.