Brookfield to Commence Tender Offer for
GrafTech Common Stock at $5.05 Per Share
GrafTech International Ltd. (NYSE:GTI) (“GrafTech” or the
“Company”) today announced it has entered into a definitive
agreement and plan of merger with an affiliate of Brookfield Asset
Management Inc. (NYSE: BAM) (TSX: BAM.A) (Euronext: BAMA)
(“Brookfield”) under which Brookfield will commence a tender offer
to acquire up to all of the outstanding shares of GrafTech common
stock. The definitive agreement was unanimously approved by
GrafTech’s Board of Directors and follows the letter of intent
announced by GrafTech on April 29, 2015. Holders of approximately
11% of the outstanding shares of GrafTech common stock, including
GrafTech director Nathan Milikowsky, have agreed to support the
transaction and tender their shares in the tender offer.
Under the terms of the agreement, Brookfield will commence a
tender offer to purchase up to all of the outstanding shares of
GrafTech common stock at a purchase price of $5.05 per share,
representing a premium of 26% over the average closing price of the
Company's common shares during the 60 trading days ended April 28,
2015. The tender offer is not subject to any financing
conditions.
The tender offer is intended to provide GrafTech stockholders
the option to choose immediate liquidity at a premium as described
above or to participate in GrafTech as a stockholder following the
closing of the tender offer (subject to the merger provisions
described below) with the benefit of Brookfield sponsorship going
forward. A stockholder might choose to accept a combination of both
cash and continued ownership of GrafTech shares.
The Company believes that Brookfield has an exceptional track
record sponsoring public companies in difficult underlying market
conditions, including significant knowledge and experience in
steel, mining and metals, and other industrial sectors.
Pursuant to the agreement, the tender offer will commence no
later than May 26, 2015 and will expire at 12:00 midnight, New York
City time, on July 7, 2015, unless extended in accordance with the
terms of the agreement and the applicable rules and regulations of
the Securities and Exchange Commission. Consummation of the tender
offer is subject to certain conditions, including receipt of
required regulatory approvals, the tender of a number of GrafTech
shares that, together with any other shares then owned by
Brookfield (including shares issuable upon conversion of the
convertible preferred stock expected to be issued to Brookfield as
previously announced), would represent at least 30% of the then
outstanding shares plus shares issuable upon such conversion (the
“minimum tender condition”), and other customary conditions.
Assuming the convertible preferred stock is issued prior to the
expiration of the tender offer, as of the date hereof, satisfaction
of the minimum tender condition would require the tender of
approximately 15% of the currently outstanding GrafTech shares.
If the number of GrafTech shares tendered, together with any
other shares then owned by Brookfield (including shares issuable
upon conversion of the convertible preferred stock expected to be
issued to Brookfield as previously announced), would represent at
least 80% of the then outstanding shares plus shares issuable upon
such conversion (the “merger condition”), then the remaining
outstanding GrafTech shares will be acquired in a merger
transaction at the same price offered in the tender offer. Assuming
the convertible preferred stock is issued prior to the expiration
of the tender offer, as of the date hereof, satisfaction of the
merger condition would require the tender of approximately 75% of
the currently outstanding GrafTech shares.
Additional details regarding the tender offer are or will be
made available in Brookfield’s and the Company’s respective filings
with the Securities and Exchange Commission.
J.P. Morgan Securities LLC is serving as financial advisor, and
Withers LLP and Willkie Farr & Gallagher LLP are serving as
legal counsel, to GrafTech in connection with the transaction.
Weil, Gotshal & Manges LLP is serving as legal counsel to
Brookfield in connection with the transaction.
About GrafTech
GrafTech International is a global company that has been
redefining limits for more than 125 years. We offer innovative
graphite material solutions for our customers in a wide range of
industries and end markets, including steel manufacturing, advanced
energy applications and latest generation electronics. GrafTech
operates 18 principal manufacturing facilities on four continents
and sells products in over 70 countries. Headquartered in
Independence, Ohio, GrafTech employs approximately 2,400 people.
For more information, call 216-676-2000 or visit
www.GrafTech.com.
Notice to Investors
The tender offer described above has not yet commenced. This
communication is not an offer to buy nor a solicitation of an offer
to sell any shares of common stock of GrafTech. The solicitation
and the offer to buy shares of common stock of GrafTech will
be made pursuant to a tender offer statement on Schedule TO,
including an offer to purchase, a letter of transmittal and other
related materials that Brookfield intends to file with the SEC. In
addition GrafTech intends to file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 with
respect to the tender offer. Stockholders will be able to obtain
the tender offer statement on Schedule TO, the offer to purchase,
the Solicitation/Recommendation Statement of GrafTech on Schedule
14D-9 and related materials with respect to the tender offer and,
if applicable, the merger, free of charge at the website of the SEC
at www.sec.gov, and from any information agent named in the tender
offer materials. Stockholders may also obtain, at no charge, any
such documents filed with or furnished to the SEC by GrafTech under
the "Investors Relations" section of GrafTech's website at
www.graftech.com. STOCKHOLDERS ARE ADVISED TO READ THESE DOCUMENTS,
INCLUDING ANY SOLICITATION/RECOMMENDATION STATEMENT OF GRAFTECH AND
ANY AMENDMENTS THERETO, AS WELL AS ANY OTHER DOCUMENTS RELATING TO
THE TENDER OFFER AND, IF APPLICABLE, THE MERGER THAT ARE FILED WITH
THE SEC, CAREFULLY AND IN THEIR ENTIRETY, PRIOR TO MAKING ANY
DECISIONS WITH RESPECT TO WHETHER TO TENDER THEIR SHARES INTO ANY
POTENTIAL TENDER OFFER BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF ANY POTENTIAL
TENDER OFFER.
Forward-Looking Statements
This news release and related discussions may contain
forward-looking statements about such matters as: the proposed
tender offer and merger, the conditions to consummation thereof,
the terms thereof and related matters; a proposed issuance of
convertible preferred stock, the conditions to consummation of such
potential issuance, the terms of any such potential issuance and
stock, the use of proceeds and related matters; the effects of such
proposed issuance, tender offer and merger under our equity award
and benefit plans and agreements or our credit agreement, senior
notes or senior subordinated notes; our outlook for 2015; future or
targeted operational and financial performance; growth prospects
and rates; the markets we serve; future or targeted profitability,
cash flow, liquidity, sales, costs and expenses, tax rates, working
capital, inventory levels, debt levels, capital expenditures,
EBITDA, cost savings and business opportunities and positioning;
strategic plans; cost, inventory and supply-chain management;
rationalization and related activities; the impact of
rationalization, product line changes, cost competitiveness and
liquidity initiatives; expected or targeted changes in production
capacity or levels, operating rates or efficiency in our operations
or our competitors' or customers' operations; future prices and
demand for our products; product quality; diversification, new
products and product improvements and their impact on our business;
the integration or impact of acquired businesses; investments,
acquisitions, asset sales or divestitures that we may make in the
future; possible financing or refinancing (including factoring and
supply-chain financing) activities; our customers' operations,
order patterns and demand for their products; the impact of
customer bankruptcies; our position in markets we serve; regional
and global economic and industry market conditions, including our
expectations concerning their impact on us and our customers and
suppliers; conditions and changes in the global financial and
credit markets; legal proceedings and antitrust investigations; our
liquidity and capital resources, including our obligations under
our senior subordinated notes that mature in November 2015 ; tax
rates and the effects of jurisdictional mix; the impact of
accounting changes; and currency exchange and interest rates and
changes therein.
We have no duty to update these statements. Our expectations and
targets are not predictions of actual performance and historically
our performance has deviated, often significantly, from our
expectations and targets. Actual future events, circumstances,
performance and trends could differ materially, positively or
negatively, due to various factors, including: failure to satisfy
the conditions contained in the definitive agreements relating to
the proposed issuance, tender offer and merger to consummation
thereof, including due to material adverse changes affecting the
Company or its prospects or failure to obtain regulatory approvals;
litigation in relation to such transactions; events of default
occurring or repurchase obligations arising under our credit
agreement, senior notes or senior subordinated notes related to the
proposed tender offer and merger, or otherwise (including by reason
of cross default provisions thereunder); downgrades in the ratings
of our senior notes and the requirement to repurchase the senior
notes that could arise as a result thereof; restrictions on the
conduct of our business in the ordinary course due to provisions
under such definitive agreements; failure to achieve cost savings,
EBITDA or other estimates; actual outcome of uncertainties
associated with assumptions and estimates used when applying
critical accounting policies and preparing financial statements;
failure to successfully develop and commercialize new or improved
products; adverse changes in cost, inventory or supply-chain
management; limitations or delays on capital expenditures; business
interruptions, including those caused by weather, natural disaster
or other causes; delays or changes in, or non-consummation of,
proposed or planned asset sales, divestitures, investments or
acquisitions; failure to successfully integrate or achieve expected
synergies, performance or returns expected from any completed
investments or acquisitions; inability to protect our intellectual
property rights or infringement of intellectual property rights of
others; changes in market prices of our securities; changes in our
ability to obtain new or refinance existing financing on acceptable
terms, or at all; adverse changes in labor relations; adverse
developments in legal proceedings or antitrust or other
investigations; non-realization of anticipated benefits from, or
variances in the cost or timing of, organizational changes,
rationalizations and restructurings; loss of market share or sales
due to rationalization, product-line changes or pricing activities;
negative developments relating to health, safety or environmental
compliance, remediation or liabilities; downturns, production
reductions or suspensions or other changes in steel, electronics
and other markets we or our customers serve; customer or supplier
bankruptcy or insolvency events; political unrest which adversely
impacts us or our customers' businesses; declines in demand;
intensified competition and price or margin decreases;
graphite-electrode and needle-coke manufacturing capacity
increases; fluctuating market prices for our products, including
adverse differences between actual graphite-electrode prices and
spot or announced prices; consolidation of steel producers;
mismatches between manufacturing capacity and demand; significant
changes in our provision for income taxes and effective income-tax
rate; changes in the availability or cost of key inputs, including
petroleum-based coke or energy; changes in interest or
currency-exchange rates; inflation or deflation; failure to satisfy
conditions to government grants; continuing uncertainty over fiscal
or monetary policies or conditions in the U.S., Europe, China or
elsewhere; changes in fiscal and monetary policy; a protracted
regional or global financial or economic crisis; and other risks
and uncertainties, including those detailed in our SEC filings, as
well as future decisions by us. This news release does not
constitute an offer or solicitation as to any securities.
References to street or analyst earnings estimates mean those
published by First Call.
GTI-G
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version on businesswire.com: http://www.businesswire.com/news/home/20150518005504/en/
GrafTech International Ltd.Director, Investor RelationsKelly
Taylor, 216-676-2000