Story from Dow Jones Newswire
By James Gordon
OF DOW JONES NEWSWIRES
TORONTO (Dow Jones)--Global Thermoelectric Corp. (T.GLE) shares are up 12%
after the company announced it had received a "superior proposal" than the
offer for the company from Quantum Fuel Systems Technologies Worldwide Inc.
(QTWW).
In Toronto Monday, the stock is up 36 Canadian cents to C$3.42 on about
601,000 shares. The stock traded as high as C$3.50 earlier Monday.
As reported, Quantum's proposed acquisition of Global, a developer of
fuel-cell technology, was announced April 9, an all-stock deal valued at C$75
million. It came several months after Global cut its workforce by 30% and
hired a financial adviser to review strategic alternatives.
Global's director of corporate affairs, Mark Cryzan, said the company is
proceeding with the Quantum agreement for the time being. "The Quantum deal is
still going ahead, and it's the only deal going ahead right now," Cryzan said.
"But we have an unsolicited superior offer from a third party, and it's the
board's fiduciary responsibility to enter discussions."
Cryzan said everything was being "played out as per the agreement we drew up
with Quantum," which included provisions that Quantum be informed of any
superior offers.
Raymond James analyst Andrew Bradford said he didn't expect another offer so
late in the game. "It really does surprise me," he said. "Global's been up for
sale for a long time, and I thought all the potential suitors would have shown
up" before now.
"Based on Friday's stock price, the impled value (of the Quantum deal) for
Global investors would have been C$3.60, which is a fair price," said
Bradford, who doesn't own stock in either company, and whose firm doesn't have
an investment-banking relationship with either.
On Nasdaq, Quantum is down 36 cents, or 11.5%, to $2.77.
Bradford said he could "speculate accurately" about who the new bidder could
be, but declined to do so. He said a potential bidder would just be "kicking
tires" this early.
Quantum president and chief executive Alan Niedzweicki also didn't expect a
competing offer to surface, though he said he never considered the deal done
until a shareholder vote at Global.
"We knew someone could come along in the process and make a competing offer,
and it's just something we have to deal with," he said. "I think it confirms
the technology [Global] has is good technology."
Niedzweicki said Quantum has the option to increase its offer in the event
of a superior competing offer, but said he "didn't even know yet" if it would.
Analyst Sarah Hughes of Sprott Securities said the Quantum deal would be
fair to shareholders, but said there was always potential for another bidder
to step up. "A lot of people thought (the Quantum bid) was low because of the
technology, but nobody came to the table," said Hughes, who doesn't own stock
in either company. Sprott doesn't have an investment-banking relationship with
either.
Hughes said she doesn't know the identity of the third party.
In a report Monday from National Bank Financial, analyst MacMurray Whale
said he believed a superior bid was made because of the perception that
Global's Solid Oxide Fuel Cell unit was being undervalued.
"In the past, analysis indicates a share price closer to a C$4.14 with no
consideration for the Solid Oxide Fuel Cell division," he said. "Considering a
U.S.-based suitor/acquiror can successfully negotiate a SECA grant from the
U.S. Depratment of Energy, the SOFC unit could have considerably more value."
It wasn't immediately clear if Whale owns Global shares, or if National Bank
Financial has an investment-banking relationship with either company.
Global said Monday it will enter talks with the unidentified third party
once a confidentiality agreement is signed.
Cryzan said the the company still expects to mail information to sharholders
next week, and hold a vote on the Quantum bid Aug. 26. "We're going to deal
with (the new offer) in weeks, not months," he said. "It's not going to be a
long process."
Company Web Sites: globalte.com,, qtww.com
-James Gordon, Dow Jones Newswires; 416-306-2028 |
