PGT Innovations recently announced that its board of directors has carefully reviewed an unsolicited buyout proposal from Miter Brands. The proposal suggests a cash offer of $41.50 per share. However, after careful consideration, the board unanimously concluded that this proposal is not superior to the existing offer from Masonite International.
Although it is acknowledged that Miter may have the potential to enhance certain aspects of their proposed transaction through future negotiations, PGTI firmly believes that Masonite’s current offer outshines Miter’s proposal.
In the agreement reached on December 18th, PGTI agreed to be acquired by Masonite for $41 per share. This offer consists of $33.50 in cash and 0.07353 shares of Masonite stock.
PGTI has expressed its intentions to engage in discussions with Miter in order to explore possibilities for improving their bid. However, it is important to note that Miter’s current proposal introduces additional closing risks compared to the pending transaction with Masonite.
One concerning element of Miter’s proposal is that it requires PGTI to pay an up-front termination fee of $84 million to Masonite. This fee exceeds the value of the additional consideration in Miter’s proposal by more than 2.5 times. Furthermore, Miter has not offered to cover this fee on PGTI’s behalf, unlike other competing bids.
If PGTI and Miter are able to negotiate terms that the PGTI Board deems a superior proposal, Masonite will have a four business day window to potentially improve the terms of its existing merger agreement with PGTI.
On a separate note, Masonite has expressed its unwavering commitment to the current terms of the transaction with PGT Innovations. They firmly believe that the definitive merger agreement reflects a fair value for PGTI and its shareholders.
