NEW YORK ( TheStreet) -- Vulcan Materials ( VMC - Get Report) said that Martin Marietta Materials' ( MLM - Get Report) $4.9 billion bid for the company is "illegal and opportunistic" in a Thursday disclosure, and used a fairness opinion by Goldman Sachs ( GS) to support claims that it is mispriced. The disclosure by Vulcan adds to the contested December bid by Martin Marietta, which would merge the two U.S. leaders in construction aggregates.
In Vulcan's rebuff to the takeover, it says that Goldman Sachs has deemed the bid as inadequate, saying that pricing is too low, synergies are too few and antitrust hurdles are too high. In a filing with the Securities and Exchange Commission, Vulcan also says that Martin Marietta may disclose "highly sensitive, material, non-public and confidential information." On Tuesday, Vulcan filed a lawsuit contesting both the terms of the merger and Martin Marietta's process. In making a bid, Martin Marietta signed a non-disclosure agreement to keep private information obtained when analyzing Vulcan's books for a hostile bid. However, in making a share-exchange offer for the company, Martin Marietta may be compelled to release some information to satisfy SEC disclosure requirements. In addition, Vulcan is standing by its guns that the bid is cheap for the construction industry and that it takes advantage of a business trough - this time with Goldman's support. When the deal was announced TheStreet pointed out that Martin Marietta will be contributing just half its shares to acquire Vulcan, which has roughly sales roughly twice as large. Earlier in December, Martin Marietta made an all-stock share offer, where Vulcan will tender its shares at a ratio of 0.5 of each Martin Marietta share. The combination values Vulcan at $36.69 a share, a 15% premium to the average closing price - however it is below 2011 highs and well below pre-recession share prices over $100. For more on Martin Marietta see 20 top yielding materials construction stocks. For more on Vulcan materials see Eagle Investment Management's portfolio. Last Friday, Vulcan filed a lawsuit in Superior Court of New Jersey charging that Martin Marietta had been "covertly" plotting a hostile bid and that its recent offer was an attempt to "snatch Vulcan for the lowest possible price and on its own terms."
To that suit, Martin Marietta Materials responded that it is "not dissuaded by what may be intemperate rhetoric of litigation," from Vulcan Materials in its $4.9 billion hostile takeover bid for the construction materials and asphalt giant. In a letter publicly released on Saturday, Martin Marietta also said that a lawsuit filed on Friday by Vulcan "serious mischaracterizes" its bid and the Vulcan board of directors are not working in shareholders' best interest. "This is a remarkable statement on behalf of a Board of Directors that purportedly has not taken a public position on our proposal," Martin Marietta said in its letter. "If true, this acknowledged predetermination by the Vulcan board to refrain from engaging in meaningful discussions with Martin Marietta clearly is contrary to the best interests of Vulcan and its shareholders." On Tuesday, Vulcan ratcheted up its litigation, putting Martin Marietta's share offer in a catch-22 of sorts. Because Martin Marietta made a share bid, it's compelled to disclose non-public materials it received in making the bid - however those disclosures may cut against a non-disclosure agreement agreed when Vulcan handed over the materials. Steven Davidoff, the "deal professor" of the New York Times wrote in a recent article that the claim is the deal's only "show stopper.". With Goldman's "inadequacy opinion" on Martin Marietta's bid Vulcan may now have bolstered support to contest the combination. If a deal is eventually struck, the combined company would dominate competitors like MDU Resources ( MDU) and Valmont Industries ( VMI) with over 4.3 billion in annual sales. -- Written by Antoine Gara in New York