Dorel has announced a 10% increase in the offer to buy the public shares of Dorel Industries and privatize the company. The announcement was made after Canadian investment firm, Letko, Brosseau & Associates said it would vote against the previous offer at an upcoming shareholder meeting.
In November last year, a family group including Dorel's top executives, Martin Schwartz, Jeffrey Schwartz, Alan Schwartz and Jeff Segel initially stated their intention to take the firm private with the backing of Cerberus Capital Management. The group initially offered stockholders a share price of C$14.50 ($11.30) for all outstanding shares. However, Letko, Brosseau & Associates, which owns approximately 12.6% of the outstanding shares, felt the valuation was too low and declared that they would vote against the offer.
The family shareholder group rescheduled the special shareholder meeting to vote on whether to accept the offer. The new date for the meeting is February 16th, 2021. The company noted that the revised offer of C$16.00 ($12.47) is above the mid-point of the range of values determined by TD Securities, which had valued shares at between C$14.00 and C$17.00 per share.
Letko, Brosseau & Associates have not yet replied to the increased price offer. The transaction needs approval by two-thirds of the votes cast, and by more than 50% of the votes cast by non-family shareholders.
