Berkshire Hathaway offered to purchase Shaw Industries, Inc.
OFFICIAL VERSION:
berkshirehathaway.com
>>> For Immediate Release
BERKSHIRE HATHAWAY ANNOUNCES
OFFER TO PURCHASE SHARES OF
SHAW INDUSTRIES
Omaha, Nebraska (September 6, 2000) - Berkshire Hathaway Inc. (NYSE:BRK.A, BRK.B) today announced that it has offered to purchase between 80.1% and 86% of the outstanding shares of Shaw Industries, Inc. (NYSE:SHX) for $19 per share in cash, subject to approval of Shaw’s Board of Directors. The offer is not subject to any financing contingencies.
The offer is contingent upon Robert E. Shaw, the Chairman of the Board of Directors and Chief Executive Officer, and Julian D. Saul, the President of Shaw Industries, together with members of their immediate families, each retaining a minimum of 5% ownership interest. Other shares not purchased by Berkshire Hathaway would be owned by other members of management of Shaw Industries and members of the Shaw and Saul families not included in the 5% ownership requirement. Shaw Industries would continue to be operated under its current management with the corporate headquarters remaining in Dalton, Georgia.
Up to 10% of the shares held by each of the Shaw and Saul family members would, at their option, be purchased by Berkshire Hathaway each year beginning March 31, 2002, at a price equal to $19 per share plus the increase in book value per share over the book value per share as of December 31, 2000. Up to one-third of the shares held by other members of management and the Shaw and Saul family members not included in the 5% ownership requirement would, at the option of those shareholders, be purchased each year beginning March 31, 2002, at the same pricing formula.
Shaw Industries, Inc. is the world’s largest manufacturer of tufted broadloom carpet. Headquartered in Dalton, Georgia, Shaw sells carpeting and rugs for residential and commercial applications throughout the United States and exports to most markets worldwide. Shaw markets its residential products under such brand names and trademarks as Cabin Crafts, Couture by Sutton, Cumberland, Expressive Designs, Home Foundations, Philadelphia, Queen, ShawMark, Sutton, TrustMark, Evans & Black, Salem, Tuftex, and Shaw Rugs. Shaw markets its commercial products under the names Shaw Contract, Designweave, Patcraft, and Queen Commercial. Through its network of commercial dealers known as Shaw Contract Flooring Services, Shaw also sells commercial flooring products directly and provides installation and project management services. Shaw also offers laminate flooring through the Decades brand and ceramic tile through Shaw Ceramics, and hardwood flooring through Shaw Hardwoods.
Berkshire Hathaway is a holding company owning subsidiaries engaged in a number of diverse business activities. The most important of these is the property and casualty insurance business conducted on both a direct and reinsurance basis through a number of subsidiaries.
Contact: Marc D. Hamburg of Berkshire Hathaway Inc., telephone 402-346-1400.<<<
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UNOFFICIAL VERSION:
biz.yahoo.com
>>>Wednesday September 6, 7:11 pm Eastern Time
Berkshire bids about $2 bln for U.S. carpet firm
(UPDATE: recasts with analyst comment, background, updated stock prices, changes dateline, pvs NEW YORK)
DALTON, Ga., Sept 6 (Reuters) - Berkshire Hathaway Inc. (NYSE:BRKa - news) (NYSE:BRKb - news), the holding company run by billionaire financier Warren Buffett, on Wednesday offered about $2 billion in cash for Shaw Industries Inc. (NYSE:SHX - news), sending shares of the U.S. carpet maker soaring more than 50 percent.
Dalton, Ga.-based Shaw Industries, the largest maker of tufted broadloom carpets, announced in a statement that Berkshire Hathaway had offered to buy between 80.1-percent and 86 percent of its outstanding shares at $19 per share in cash.
The takeover bid, which has the tentative support of Shaw Industries Chief Executive Officer Robert Shaw and Julian Saul, the company's president, propelled the firm's stock $6-7/16 higher to close at $18-5/8 on the New York Stock Exchange.
Omaha, Neb.-based Berkshire's class A shares fell $1,250 to close at $58,000 on the NYSE, while its class B shares ended $34 lower at $1,911 on the exchange. The proposed deal must be approved by Shaw Industries' board of directors.
Analysts, however, saw no reason to criticise the bid.
``The (takeover) price is what I had for a price target for Shaw, so I can't argue that it was unfair. It's what I thought it should be trading for,'' said Kay Norwood, analyst with Wachovia Securities.
With about 127 million Shaw Industries' shares outstanding, according to Standard & Poor's MarketScope, Berkshire's bid is valued between $1.93 billion and $2.08 billion.
Norwood, who said she had changed her rating on Shaw Industries' stock to a neutral from a strong buy, said the company's management team appeared likely to remain intact under the Berkshire offer.
In its statement, Shaw Industries indicated that the proposed deal was contingent on Shaw, Saul and members of the two executives' families retaining at least a 10-percent stake in the Georgia company.
Shares not purchased by Berkshire Hathaway would be owned by other executives and members of the Shaw and Saul families not covered by the 10-percent ownership requirement.
Berkshire, which already owns significant stakes in Coca-Cola Co. (NYSE:KO - news) and American Express Co. (NYSE:AXP - news), declined to comment beyond the Shaw Industries' statement.
``Shaw has been an exceptional performer. It's a powerhouse company whose earnings are 10 times what they were 16 years ago,'' said James Armstrong of private money managers Henry Armstrong Associates in Pittsburgh.
``Shaw is also one of only three dominant players in the market and it has excellent management,'' Armstrong added. ``That's consistent with what Buffett likes.''
But the takeover offer came at a time when Shaw Industries and its main rival Calhoun, Ga.-based Mohawk Industries Inc. (NYSE:MHK - news) faced a slump due to the negative impact of rising U.S. interest rates on carpet firms and other manufacturers.
The two companies also agreed last month to settle class-action lawsuits related to allegations of price-fixing in the carpet industry in the 1990s.
Both companies had vigorously denied the charges, but said they had settled the cases separately to avoid further litigation costs.
Mohawk has said it would pay $13.5 million and take a $7 million charge in its fiscal third quarter in connection with the settlement. Shaw Industries said its payment amounted to $27.5 million including attorneys' fees and costs.
Mohawk gained $3-1/16 to close at $26-1/2 on Wednesday on the NYSE, near its 52-week high of $27-13/16 but down from about $38 a share in May, 1999. <<< |
