Independent ceiling fan and lighting distributor Litex Industries announced on Jan. 14 that it made a cash offer to Craftmade Intl. Inc.’s Board of Directors on Jan. 8 to acquire the company for $3.25 per share in cash.
In a press release following this announcement, Craftmade indicated that its Board of Directors “unanimously rejected” the “unsolicited” proposal because it undervalues the company and is not in the best interest of the stockholders.
According to the Litex announcement, its offer represents a premium of 75.7 percent to Craftmade’s closing price of $1.85 on Dec. 31, 2009, and a 70.2 percent premium to the company’s average closing price of $1.91 over the past 30 trading days ending Dec. 31.
However, Craftmade argues that its common stock has traded above the $3.25 per share price as recently as Oct. 19, 2009.
The acquisition bid is strategic for Litex due to Craftmade’s focused strength in the lighting showroom channel. Litex has solid footing in the DIY market, and its Ellington brand has been growing its showroom base while expanding to serve the design trade.
The Litex proposal is conditioned on cancellation of Craftmade’s stockholder rights plan and completion of due diligence.