Bell Industries Sends Third Letter to Coast Distribution Board, Further Increasing Its Offer to Acquire Company
May 05 2006 - 5:00PM
Business Wire
Bell Industries, Inc. (AMEX:BI) said today it has sent a third
letter to the board of directors of The Coast Distribution System,
Inc. (AMEX:CRV), again expressing its desire to meet with members
of Coast's board or Coast's financial advisor to discuss entering
into negotiations to acquire the company, and again increasing its
offer, to $8.10 per share of common stock, to acquire the company.
Bell's previous offer was $7.70 per share, and its initial offer
was $7.16 per share. In his latest letter, dated May 5, 2006, John
A. Fellows, Bell's president and chief executive officer, said in
the event that Bell does not receive a favorable response to its
letter, it "will not hesitate" to nominate two directors for
election to Class III of the Coast's board of directors at the
company's 2006 annual meeting of shareholders. The full text of the
letter is set forth below: -0- *T The Coast Distribution, Inc. 350
Woodview Avenue Morgan Hill, CA 95037 Attn: Board of Directors
Gentlemen: By letter to you dated December 14, 2005, Bell
Industries, Inc. ("Bell" or "we") reiterated its willingness to
enter into a negotiated transaction to acquire 100% of the
outstanding shares of common stock of The Coast Distribution
System, Inc. ("Coast" or the "Company") and increased its offer
price from $7.16 to $7.70 in cash per share. We learned on February
3, 2006 that a Special Committee of the Board of Directors of the
Company (the "Special Committee"), with the assistance of its
financial advisor, Seven Hills Partners, LLC, rejected our offer as
not in the best interests of Coast's shareholders. We continue to
believe that a strategic sale of Coast to Bell is the best way to
maximize shareholder value and do not believe that Coast can unlock
its intrinsic value as a stand-alone entity. We are therefore
reiterating our desire to negotiate a transaction with Coast on a
friendly basis. Accordingly, Bell is increasing its offer to $8.10
per share of common stock. Our new offer represents an attractive
premium to Coast shareholders of $0.74, or 10%, over the average
closing per share price of $7.36 for the month prior to this new
offer. Our new offer remains subject to the same conditions as set
forth in our letter of December 6, 2005 to the Chairman and Chief
Executive Officer of Coast, Thomas R. McGuire. We continue in our
willingness to shorten the period of due diligence and to defer the
exclusivity provisions until such time as we have entered into a
definitive merger agreement. We are prepared and eager to meet with
the members of the Board of Directors or its financial advisor at
any time to negotiate a friendly transaction. However, in the event
that we do not receive a favorable response to this letter, we will
not hesitate to nominate two directors for election to Class III of
the Board of Directors at the Company's 2006 annual meeting of
shareholders. If elected, our nominees would support Bell's
platform, which is to seek the immediate sale of the Company to
Bell, or the highest offeror, and to restore good corporate
governance practices at Coast. We trust that you will agree that
our offer presents an opportunity for Coast's shareholders to
realize full value for their shares and that you will respond
positively to our increased offer. We look forward to working with
you to what we believe is a compelling transaction for your
shareholders. *T About Bell Industries, Inc. Bell is comprised of
two business units, Bell Tech.logix and Bell Recreational Products.
Bell Tech.logix offers a comprehensive portfolio of technology
products and managed lifecycle services, including planning,
product sourcing, deployment and disposal, and support services.
Bell Recreational Products distributes after-market parts and
accessories primarily to the recreational vehicle and boating
markets. Forward-Looking Statements Statements in this press
release may be "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These
statements are based on current expectations, estimates and
projections about the company's business based, in part, on
assumptions made by management. These statements are not guarantees
of future performance and involve risks, uncertainties and
assumptions that are difficult to predict. Therefore, actual
outcomes and results may, and probably will, differ materially from
what is expressed or forecasted in such forward-looking statements
due to numerous factors, including those described above and those
risks discussed from time to time in the company's filings with the
Securities and Exchange Commission, including Factors That May
Affect Future Results of Operations included in the Form 10-K for
the year ended December 31, 2005 and Management's Discussion and
Analysis of Financial Condition and Results of Operations in the
Form 10-K for the year ended December 31, 2005. In addition,
general industry and market conditions and growth rates and general
economic conditions could affect such statements. Furthermore,
there is the risk that this offer may not be accepted by The Coast
Distribution System or, if accepted, the transaction will not be
consummated. Any forward-looking statements speak only as of the
date on which they are made, and the company does not undertake any
obligation to update any forward-looking statement to reflect
events or circumstances after the date of this release. Additional
Information Investors and security holders are urged to read the
disclosure documents regarding the proposed merger as they become
available because they will contain important information.
Investors and security holders will be able to obtain a free copy
of any such disclosure documents as they become available, as well
as other filings containing information about Bell Industries and
The Coast Distribution System, without charge, at the SEC's
internet site (http://www.sec.gov). Copies of the disclosure
documents and the filings with the SEC that will be incorporated by
reference in such disclosure documents can also be obtained without
charge, as they become available, by directing a request to
PondelWilkinson Inc., as information agent for Bell Industries,
Inc. at 1880 Century Park East, Suite 700, Los Angeles, CA 90067,
telephone: 310-279-5980, e-mail address: investor@pondel.com. The
directors and executive officers of Bell Industries may be deemed
to be participants in the solicitation of proxies from The Coast
Distributions Systems shareholders in respect of the proposed
merger. Information regarding the directors and executive officers
of Bell Industries is currently available in its proxy statement
filed with the SEC by Bell Industries on May 1, 2006. Other
information regarding the participants in such proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in any disclosure
documents and any other relevant materials that will be filed by
Bell Industries with the SEC as they become available. Any
information concerning The Coast Distribution System contained in
this document has been taken from, or is based upon, publicly
available information. Although Bell Industries does not have any
information that would indicate that the information contained in
this document that has been taken from such documents is inaccurate
or incomplete, Bell Industries does not take any responsibility for
the accuracy or completeness of such information.
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