L.B. Foster, Portec merger time line extended
Pittsburgh Business Times - by Malia Spencer
The merger time line between L.B. Foster Co. (Nasdaq: FSTR) and Portec Rail Products Inc. (Nasdaq: PRPX) has been extended and the two companies agreed to waivers that would allow Portec to speak with a third party regarding another offer for the company.
The “drop dead date” for the merger was pushed to the end of the business day Aug. 31 and the two companies have agreed that the deal would not be consummated before July 16, as a result of talks with the Department of Justice Antitrust Division, according to statements released by both companies.
Additionally, Portec Rail officials have the go-ahead to speak with Ameridan Resources LLC regarding a verbal offer from Ameridan.
Green Tree-based L.B. Foster, which manufactures, fabricates and distributes products for rail construction and utility markets, first announced in February a tender offer to buy the outstanding shares of O’Hara-based Portec Rail for $11.71 per share, of $112 million. In March, the two companies received requests for additional information from the federal Antitrust Division and the two have stated they are cooperating.
Separately, the merger announcement also garnered a series of shareholder law suits. On April 21, a judge with the Court of Common Pleas of Allegheny County handed down a preliminary injunction finding that Portec Chairman Marshall T. Reynolds and the board of directors had breached their fiduciary duties by, among other things, not fully considering a slightly higher offer of $12 a share made by Ameridan Resources.
Amendments to the merger agreement filed with the Securities and Exchange Commission specify that Portec officials are allowed to speak with Ameridan about its verbal inquiry to purchase Portec’s outstanding shares. However, that is the only such action the company can take that would “reasonably likely facilitate, induce or encourage any inquiries with respect to proposals for transactions with third parties,” according to the amendment.
Portec had no comment on the time frame for such discussions. The company manufactures and distributes rail products.
L.B. Foster reported first quarters earnings of $1.8 million, or 17 cents per share, on sales of $82 million. Portec Rail had first quarter earnings of $457,000, or 5 cents a share, on sales of $23.3 million.
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