Technitrol withdraws offer to buy rival Bel Fuse
It was the Trevose company's fourth bid. The Jersey City firm had said that the offer "significantly undervalues" its business.
Technitrol Inc. of Trevose yesterday withdrew its offer to buy rival electronics-parts-maker Bel Fuse Inc. of Jersey City.
On Monday, Technitrol made its fourth offer to buy Bel Fuse - this one at $43 a share in cash, or $514 million. It said it would withdraw the offer if Bel Fuse failed to agree by Wednesday to meet to discuss it yesterday or today.
On Tuesday, Bel Fuse said the Technitrol proposal "significantly undervalues Bel's stock." In a statement, the company said its board "expressed confidence in management's plans." Bel Fuse is in the midst of negotiating an acquisition of its own, but it declined to provide details.
David Stakun, Technitrol's vice president for corporate communications, said yesterday that Bel Fuse did not directly respond to his company's request for a meeting.
"At this point, there is no offer out there, but I'm not going to comment on what the future's going to hold . . . ," Stakun said. "We still think it's a good idea to combine our two companies."
In a news release yesterday, Technitrol said it "continues to believe that its offer represented value to Bel Fuse shareholders superior to what Bel Fuse could have created alone for the foreseeable future. Technitrol now considers Bel Fuse's failure to negotiate in good faith to be a matter between Bel Fuse and its shareholders."
Stakun said Technitrol was always considering potential acquisitions. Between 1996 and 2006, it acquired 17 companies or operations, boosting its revenue to $954 million from $243 million. "This try that we just made was just one try in a pretty consistent strategy over the years," he said.
Shawn Harrison, an Independence, Ohio, analyst who covers electronics components and manufacturing services for Longbow Research, said buying Bel Fuse was appealing for Technitrol because the two had similar customers and had designers who were creating similar products. The companies' offices in California are close to each other, as are their manufacturing facilities in China.
It will be difficult to find that degree of synergy with other competitors, so Technitrol is now likely to look at smaller acquisitions, he said.
Technitrol reported yesterday after the market closed that its net earnings for first-quarter 2007 fell to $4.7 million, or 12 cents a share, from $12 million, or 30 cents a share, during the first quarter of 2006.
The company said the earnings reflected high levels of operating losses and restructuring expenses that it didn't expect to be tax-deductible.
Revenue rose to $254.4 million from $236.1 million during that period last year.
Technitrol shares fell 8 cents, to close at $27.02 yesterday on the New York Stock Exchange. Bel Fuse Class A shares fell $2.19, to $34.14, in Nasdaq trading, while Class B shares dropped $1.65, to $35.85.