ElkCorp Receives Notice That the Carlyle Group Will Not Submit Revised Acquisition Proposal
January 31 2007 - 8:35AM
Business Wire
ElkCorp (NYSE:ELK), a leading manufacturer of roofing and building
products, today announced that it has received notification from
The Carlyle Group (Carlyle) that Carlyle has determined not to
submit a revised proposal in response to the notice sent by ElkCorp
to Carlyle on January 29, 2007, of ElkCorp�s intention to terminate
the merger agreement between ElkCorp and Carlyle. As previously
disclosed, ElkCorp has received an irrevocable, binding offer from
Building Materials Corporation of America (BMCA) and certain of its
affiliates to enter into an agreement by which one of these
affiliates (BMCA Sub) would acquire all of the outstanding common
stock of ElkCorp at a price of $43.50 per share and, as a result of
this offer, sent the notice of intention to terminate to Carlyle.
As a result of these events, ElkCorp has the right to terminate the
Carlyle merger agreement upon payment to Carlyle of a termination
fee of $29 million, and thereafter is free to accept BMCA�s offer,
which expires if not accepted on or before February 6, 2007. If
ElkCorp accepts BMCA�s offer, BMCA has agreed to reimburse the full
amount of this termination fee within one business day of payment
by ElkCorp to Carlyle. Under an agreed-upon order�entered into with
a shareholder plaintiff in an action pending in a Dallas County
Court, the plaintiff is entitled to two business days� notice
of�payment of the fee. The plaintiff received such notice
yesterday. The actions are also subject to the ElkCorp Board�s
final approval to enter into the merger agreement with BMCA Sub. As
previously disclosed, under the terms of BMCA�s offer, BMCA Sub
will amend its existing offer to purchase all of ElkCorp�s
outstanding shares of common stock for $43.50 per share (the
�Tender Offer�) to conform the Tender Offer to the terms of BMCA�s
proposed merger agreement. Under the terms of the proposed
agreement, following completion of the Tender Offer, the parties
will complete a second-step merger (the �Merger�) in which all
remaining outstanding shares will be cancelled and converted into
$43.50 cash per share, without interest, or such higher amount as
may be paid for shares in the Tender Offer. Consummation of the
Tender Offer and the Merger are subject to customary closing
conditions. About ElkCorp ElkCorp, through its subsidiaries,
manufactures Elk brand roofing and building products (90% of
consolidated revenue) and provides technologically advanced
products and services to other industries. Its common stock is
listed on the New York Stock Exchange (NYSE:ELK). www.elkcorp.com
Forward-Looking Statements. Statements made in this release, our
website and in our other public filings and releases, which are not
historical facts contain �forward-looking� statements (as defined
in the Private Securities Litigation Reform Act of 1995) that
involve risks and uncertainties and are subject to change at any
time. These forward-looking statements may include, but are not
limited to, statements containing words such as �anticipate,�
�contemplate,� �believe,� �plan,� �estimate,� �expect,� �intend,�
�may,� �target,� �look forward to� and similar expressions. Factors
that could cause actual results to differ materially include, but
are not limited to, the following: costs, litigation, an economic
downturn or changes in the laws affecting our business in those
markets in which we operate. There can be no assurance that the
tender offer and second-step merger proposed by BMCA or any other
transaction will be consummated, or if consummated, that it will
increase shareholder value. The forward-looking statements involve
known and unknown risks, uncertainties and other factors that are,
in some cases, beyond our control. We caution investors that any
forward-looking statements made by us are not guarantees of future
performance or events. We disclaim any obligation to update any
such factors or to announce publicly the results of any revisions
to any of the forward-looking statements to reflect future events
or developments, except to the extent required by law. Additional
Information and Where to Find It. In connection with the Carlyle
tender offer, ElkCorp has filed a solicitation/recommendation
statement on Schedule 14D-9 with the Securities and Exchange
Commission (the "SEC"). In connection with the proposed merger with
affiliates of The Carlyle Group, ElkCorp expects to file a proxy
statement with the SEC, if required by law. In connection with the
tender offer by an affiliate of BMCA, ElkCorp expects to file a
solicitation/recommendation statement on Schedule 14D-9 with the
SEC and, if ElkCorp terminates its merger agreement with Carlyle
and enters into a merger agreement with BMCA, ElkCorp expects to
file amendments to this Schedule 14D-9. Investors and security
holders are strongly advised to read these documents (when they
become available in the case of those not yet available) because
they contain or will contain important information about the tender
offers and the proposed mergers. Free copies of materials which
filed by ElkCorp will be available at the SEC�s web site at
www.sec.gov, or at the ElkCorp web site at www.elkcorp.com, and
will also be available, without charge, by directing requests to
ElkCorp, Investor Relations, 14911 Quorum Drive, Suite 600, Dallas,
TX 75254-1491, telephone (972) 851-0472. ElkCorp and its directors,
executive officers and other members of its management and
employees may be deemed participants in the solicitation of tenders
or proxies from its shareholders. Information concerning the
interests of ElkCorp's participants in the solicitation is set
forth in ElkCorp's proxy statements and Annual Reports on Form
10-K, previously filed with the SEC, and will be set forth in proxy
statements relating to any merger, if one is required to be filed,
and in the solicitation/recommendation statements on Schedule 14D-9
when they become available.
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