Grain Handler Andersons Refuses Buyout Offer from HC2

Grain handler The Andersons Inc. announced Wednesday that its board of directors had refused two non-binding, unsolicited takeover proposals from HC2 Holdings Inc.

The Maumee, OH-based agricultural company’s announcement was released in response to HC2’s statement Tuesday that it had offered to purchase Andersons for a total price of $1.043 billion, or $37 per share of its stock.

“We believe HC2’s proposals ignore our value and prospects as a standalone entity and represent an opportunistic attempt to acquire the company at a low point in the industry cycle. Following a thorough review, and in consultation with our independent financial and legal advisors, our board determined that the offers are not credible, significantly understate the company’s true value, and are not in the best interests of our shareholders,” chairman of Anderson’s board, Mike Anderson, said in the company’s statement.

HC2s statement the previous day said that it was “confident” that the transaction would go through “given that there are no financing conditions and our exclusive understanding with a qualified strategic partner.”

The holding company’s statement included a letter it had sent to Anderson’s chairman, alleging that the company did not “substantively” respond to its second offer of $37 per share. In the letter, Phillip A. Falcone, chairman, president and chief executive officer of HC2, alleged that Andersons was currently suffering the consequences of mismanagement.

“We believe the company has been poorly managed and has not been effective in extracting synergies of any significance from the five desperate entities it owns, controls, and operates. A $100 [million] budget to build a new corporate headquarters, a bloated corporate overhead expense structure, coupled with a poor operating performance, weak earning, and a stock that is dramatically underperforming the market and down over 60% from September 2014, only crystalizes our concern that the company’s value proposition model has eroded and is at risk for further decline,” wrote Falcone.

Anderson’s took issue with Falcone’s letter in its statement, saying that it contained “numerous inaccuracies and misleading statements,” including the claim that it had failed to respond to HC2’s second offer.

The Ohio-based company said it plans to continue on its “standalone” plan.