Summary
- W. R. Grace & Co. is the target of a buyout offer at $60 per share.
- A reasonable premium to the recent share price as it falls far short of the trailing twelve-month high.
- The offer comes after a former board member, with investment banking pedigree, believes the firm is pursuing a suboptimal strategy.
- There are a lot of entrepreneurial funds with concentrated holdings here.
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W. R. Grace & Co. (GRA) received a buyout offer from investment firm 40 North at $60 per share. The bid has already been refused. That's surprised me a little bit because that's a fast response. You would think it takes time to get the board together and review what a proposal really means. Also, the refusal press release included two investment advisors.
Why are they already loading up on investment advisors in Goldman Sachs & Co. LLC (GS) and Moelis & Company LLC (MC). Here's a quote from the company in its response:
Given the Company's strong prospects and its ongoing review of the alternative opportunities available, Grace's Board of Directors unanimously believes that 40 North's $60 per share proposal significantly undervalues the Company and is not a basis for further discussion.
The Grace Board remains open to all opportunities to maximize value for shareholders.
There are a lot of interesting things to say about this event. The firm that's bidding is a public equity platform within Standard Industries. Meaning, this isn't a typical private equity firm. It has also been W. R. Grace's largest shareholder at 15% for some time. Kathy Reiland, Head of Corporate Development & Strategy at Standard Industries, has been on the board of W. R. Grace.
Ms. Reiland oversees the Corporate Development & Strategy at Standard Industries. She used to be a Partner at Evercore Partners as well as Senior Managing Director and Head of International Joint Ventures Asia. Before that, Ms. Reiland was Senior Managing Director and Chief Operating Officer of Asset Management at Evercore. Earlier in her career, she was a buy-side analyst at Alliance Bernstein.
