Industrial products maker Crane (CR) - Get Report said Monday it has commenced a cash tender offer to acquire the outstanding shares of Circor International (CIR) - Get Report for $45 a share, or roughly $1.7 billion.
The Stamford, Connecticut-based company said the offer is set to expire at 5 p.m. ET on July 16 unless its extended. The $45 price is equal to a 47% premium over the undisturbed market close on May 20, before Crane made proposal public, Crane said.
"We are commencing this cash tender offer to provide Circor shareholders a mechanism to show their support for our offer by tendering their shares," Max Mitchell, president and CEO, said in a statement. "We call on Circor shareholders to act now on this opportunity and we call on the CIRCOR Board to honor its fiduciary responsibilities and allow the shareholders it represents to receive the highly attractive premium we are offering."
Crane had made an proposal in April, which the Burlington, Massachusetts-based Circor rejected last month, declaring in a May 21 statement that "proposal was highly opportunistic, substantially undervalued Circor and its future prospects, and did not constitute a basis for engaging in further dialogue with Crane at this time."
Crane said it reiterated its proposal on June 4, stating that it "remains firmly committed to pursuing its proposal to acquire Circor" and adding that it would be willing to adjust the proposal if Circor "engages and provides justification."
"Our June 4 letter to the Circor Board again seeking engagement on our proposal while indicating a willingness to understand any justifications for adjusting our proposal has gone unanswered," Mitchell said in Monday's statement. "Continuing a pattern of disregard for its shareholders, Circor's only response was to issue a vague public statement that it would provide an update 'soon' on its financial outlook and supposed business transformation. We note again that, to date, the company has not provided any substantive response to our proposal or rationale for how it can generate value in any reasonable period of time that is comparable to our all-cash offer today."
Circor issued a statement on Monday stating its board "will carefully review and evaluate Crane's tender offer to determine the course of action that it believes is in the best interests of Circor and its shareholders."
Circor said its board intends to make its recommendations within 10 business days.
Crane shares were down slightly to $79.35, while Circor shares rose slightly to $45.09.