Bel Fuse, Inc. (NASDAQ: BELFA) (NASDAQ: BELFB) today
announced that it has made a proposal to acquire all of the
outstanding shares of Pulse Electronics Corporation (NYSE: PULS)
common stock for per share consideration of $6.00. Bel's proposal
would allow Pulse Electronics shareholders the ability to choose
whether to receive the consideration in cash or Bel Class B common
stock.
"The strategic and operational rationale for this transaction is
even more compelling today than it was in 2007 when Pulse
Electronics proposed a merger with Bel," said Daniel Bernstein,
Bel's President and CEO. "We believe the offer of cash or Bel
common stock provides immediate liquidity to Pulse Electronics'
shareholders who prefer to accept an all-cash offer and presents
others with a very attractive investment opportunity to be
shareholders in a combined company with a robust and flexible
capital structure available for future expansion."
The combination will create a more competitive global business
through lower operating costs, a wider product portfolio, and a
stronger platform of engineering capabilities. Furthermore, Bel
believes bringing these two companies together would also greatly
benefit customers, associates and other important stakeholders of
both companies by being part of a larger and stronger global
business with greater prospects than either business could achieve
on a standalone basis.
Avi Eden, a member of Bel's Board of Directors, said, "Despite
our best efforts Pulse Electronics' Board has expressed an
unwillingness to engage in meaningful negotiations and has
continued to defer discussions to some future time. We believe good
corporate governance and their fiduciary responsibilities require
the Pulse Electronics Board to seriously consider our value
enhancing proposal, which provides immediate and full value to
Pulse Electronics' shareholders."
Bel also announced today that it has nominated a slate of four
highly qualified independent director nominees for election to
Pulse Electronics' Board at its upcoming annual meeting of
shareholders, which is expected to be held in May. If elected,
these Directors will constitute a majority of Pulse Electronics'
Board.
Bel is being advised by Hedge Fund Solutions, LLC and Olshan
Grundman Frome Rosenzweig & Wolosky LLP.
The full text of the proposal letter follows:
February 28, 2011 Mr. John Burrows Lead Independent Director
Pulse Electronics Corporation 1210 Northbrook Drive, Suite 470
Trevose, PA 19053 Dear John: I am writing on behalf
of the Board of Directors of Bel Fuse Inc. ("Bel") to make a
compelling proposal for a business combination of Bel and Pulse
Electronics. Under our proposal, Bel would acquire all of the
outstanding shares of Pulse Electronics common stock for per share
consideration of $6.00 based on Bel's closing share price on
February 25, 2011, payable in the form of $6.00 in cash or 0.272 of
a share of Bel Class B common stock. Bel would provide each Pulse
Electronics shareholder with the ability to choose whether to
receive the consideration in cash or Bel Class B common stock. Of
course, if Pulse Electronics' Board would prefer to negotiate a
combined consideration of cash and stock, we are willing to
structure a transaction that makes the most sense and provides the
greatest tax advantages for your shareholders. Our financial
advisors have informed us that the necessary financing arrangements
can be obtained to complete this offer and we do not believe there
are any significant regulatory impediments to consummating this
transaction quickly. Our proposed offer price represents a
premium of 11% to Pulse Electronics' closing share price on
February 25, 2011 and a premium of approximately 22.7% to Pulse
Electronics' average closing share price for the 60 trading days
ended February 25, 2011. Importantly, this offer represents a
premium of 37.6% to Pulse Electronics' closing share price on
December 28, 2010, the last trading day prior to Pulse Electronics'
public disclosure of Bel's interest in discussing a potential
business combination and intention to nominate candidates for
election to Pulse Electronics' Board at the 2011 annual meeting of
shareholders. The strategic and operational rationale for
this transaction is even more compelling today than it was in 2007
when we last discussed a business combination. We believe the offer
of cash or Bel common stock provides immediate liquidity to Pulse
Electronics' shareholders who prefer to accept the all-cash offer
and presents others with a very attractive investment opportunity
to be shareholders in a combined company with a robust and flexible
capital structure available for future expansion. These
shareholders will participate in the significant benefits
associated with creating a more competitive global business through
lower operating costs, a wider product portfolio, and a stronger
platform of engineering capabilities. Furthermore, bringing our two
companies together would also greatly benefit our customers,
associates and other important stakeholders by being part of a
larger and stronger global business with greater prospects than
either business could achieve on a standalone basis. As you
know, I have recently discussed the possibility of either a
complete business combination or a partial asset purchase agreement
with several of Pulse Electronics' Board members. During these
meetings I indicated our flexibility as to the type of purchase and
the form of consideration. In fact, I recently proposed that Bel
would be willing to consider acquiring Pulse Electronics' Network
Product Group for cash or Bel shares or a combination thereof. I
also discussed some of the exceptional benefits this could have for
your shareholders; including management's ability to concentrate
their efforts on improving the high growth oriented wireless
business. The proposal included a possible stock ownership
component in Bel, which would allow your shareholders to
participate in the value creation synergies associated with the
business we would acquire. Despite our best efforts your
Board has expressed an unwillingness to engage in meaningful
negotiations and has continued to defer discussions to some future
time. We believe good corporate governance and your fiduciary
responsibilities require the Board to seriously consider our value
enhancing proposal, which provides immediate and full value to your
shareholders. Toward this end, we believe it is incumbent upon your
Board to explain why you will not negotiate with us at this time.
Furthermore, if you continue to maintain this position, we believe
you should provide shareholders with detailed performance
objectives for the business going forward so that the results can
be effectively measured against the attractive alternative of the
business combination we propose. While we believe it is in
the best interests of our respective shareholders to reach an
agreement on a friendly basis, and avoid the unnecessary cost and
distraction associated with the alternative, know that we are
committed to successfully completing this transaction. Our
proposal is subject to the negotiation of a definitive merger
agreement and our having the opportunity to conduct certain limited
and confirmatory due diligence. In addition, because a portion of
the aggregate merger consideration would consist of Bel stock, we
would provide Pulse Electronics the opportunity to conduct
appropriate due diligence with respect to Bel. We are prepared to
deliver a draft merger agreement to you and begin discussions
immediately. As always, I am willing and ready to meet with
you at your convenience to discuss next steps. Sincerely,
Avi D. Eden Director Cc: Pulse Electronics Board of
Directors
Bel urges Pulse Electronics' shareholders to take the necessary
steps with their custodial banks and brokerage firms to ensure they
have the ability to vote at Pulse Electronics' upcoming Annual
Meeting.
Shares held in margin accounts may be loaned out by brokers and
any shares that are subject to a stock loan cannot be voted by the
beneficial owner at the upcoming Annual Meeting if they are loaned
out as of the March 4th record date. In order to ensure that Pulse
Electronics' shareholders have the ability to vote their shares,
they should move their shares into a cash account in advance of the
March 4th record date.
Investors who are interested in adding to their ownership of
Pulse Electronics' shares and having the ability to vote these
shares at the upcoming Annual Meeting should complete any purchases
by March 1, 2010 in order to allow for trade settlement by the
record date.
ABOUT BEL FUSE, INC.
Bel (www.belfuse.com) and its divisions are primarily engaged in
the design, manufacture, and sale of products used in networking,
telecommunications, high-speed data transmission, commercial
aerospace, military, transportation, and consumer electronics.
Products include magnetics (discrete components, power transformers
and MagJack® connectors with integrated magnetics), modules (DC-DC
converters, integrated analog front-end modules and custom
designs), circuit protection (miniature, micro and surface mount
fuses) and interconnect devices (micro, circular and filtered D-Sub
connectors, passive jacks, plugs and high-speed cable assemblies).
Bel operates facilities around the world.
ADDITIONAL INFORMATION
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. No tender offer
for the shares of Pulse Electronics Corporation ("Pulse
Electronics") has commenced at this time. In connection with the
proposed transaction, Bel may file tender offer documents with the
U.S. Securities and Exchange Commission ("SEC"). Any definitive
tender offer documents will be mailed to shareholders of Pulse
Electronics. INVESTORS AND SECURITY HOLDERS OF PULSE ELECTRONICS
ARE URGED TO READ THESE AND OTHER DOCUMENTS FILED WITH THE SEC
CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. Investors and security holders will be able to
obtain free copies of these documents (if and when available) and
other documents filed with the SEC by Bel through the web site
maintained by the SEC at http://www.sec.gov.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Bel, together with the other Participants (as defined below),
intends to make a preliminary filing with the SEC of a proxy
statement and accompanying proxy card to be used to solicit proxies
for the election of its slate of director nominees at the 2011
annual meeting of shareholders of Pulse Electronics.
BEL STRONGLY ADVISES ALL SHAREHOLDERS OF PULSE ELECTRONICS TO
READ THE PROXY STATEMENT WHEN IT IS AVAILABLE BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. SUCH PROXY STATEMENT WILL BE
AVAILABLE AT NO CHARGE ON THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV.
IN ADDITION, THE PARTICIPANTS IN THE SOLICITATION WILL PROVIDE
COPIES OF THE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST.
The Participants in the proxy solicitation are anticipated to be
Bel, Bel Ventures Inc. ("Bel Ventures"), Timothy E. Brog, James
Dennedy, Melvin L. Keating and Mark B. Segall (collectively, the
"Participants"). As of the date hereof, the Participants
collectively own an aggregate of 341,725 shares of Pulse
Electronics Common Stock, consisting of the following: (1) 368
shares owned directly by Bel and (2) 341,357 shares owned directly
by Bel Ventures.
FORWARD-LOOKING STATEMENTS
Except for historical information contained in
this news release, the matters discussed in this press release are
forward-looking statements that involve risks and uncertainties.
Among the factors that could cause actual results to differ
materially from such statements are: the market concerns facing our
customers; the continuing viability of sectors that rely on our
products; the effects of business and economic conditions; capacity
and supply constraints or difficulties; product development,
commercializing or technological difficulties; the regulatory and
trade environment; risks associated with foreign currencies;
uncertainties associated with legal proceedings; the market's
acceptance of the Bel's new products and competitive responses to
those new products; and the risk factors detailed from time to time
in the Bel's SEC reports. In light of the risks and uncertainties,
there can be no assurance that any forward-looking statement will
in fact prove to be correct. We undertake no obligation to update
or revise any forward-looking statements.
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