OM Group has been taken to task many a times over the last week or so over the upcoming buyout by Apollo Group.
OM Group has taken heat from SpringOwl, Wynnefield Capital and Cove Street because it’s taking a $34 a share buyout from Apollo. However, the premium is roughly 30%. Yet, looking back over the last decade, there is no premium. Long-term shareholders are out of luck.
Left independent, would there be an opportunity to get out higher? The argument is that the company is at the bottom of its business cycle and just starting to see a turn in its European operations.
Cover Street thinks the company’s value is closer to $45 a share while SpringOwl has called for $60 a share. So Apollo will reap all these benefits for a rebound in the business and the restructuring plan that the company announced earlier this year.
The activist investor involved here is FrontFour Capital, who got a director put on the board, but the deal was announced before he actually showed up for the job. The company didn’t hold a conference call to discuss the Apollo buyout or field questions. They’re dedicated on getting this deal wrapped up as soon as possible. It appears the agitated hedge funds and long-term shareholders are simply SOL.