Belden bids $280 mln for Canada's RuggedCom
Cable manufacturer Belden (NYSE:BDC) said it plans to buy Canada's RuggedCom (TSE:RCM) for $280 million in an all-cash deal.
RuggedCom also makes connectivity and networking products, but specializes in producing components and systems for harsh conditions such as on oil wells or for military field use.
Belden is offering $22 per share, a 62 percent premium to RuggedCom's closing price of $13.61 on Friday.
Monday morning, RuggedCom stock was changing hands at $22.75, up 67 percent.
The US company's offer also represents an 87 percent premium to RuggedCom's enterprise value as of Friday, Belden said.
Belden has been looking for acquisitions in the smart grid space after it purchased GarrettCom for about $52 million last year.
Belden's president and CEO, John Stroup, said: "For RuggedCom shareholders, the offer is compelling in that it provides certainty of value and immediate liquidity at an attractive premium to RuggedCom's pre-offer share price.
"This offer is grounded in Belden's growth strategy to enhance our global networking business portfolio.
"We believe that the combined company would be a technology leader in Belden's target market segments and would deliver considerable value for Belden customers and shareholders, as well as provide growth opportunities to RuggedCom employees."
In a separate statement, RuggedCom cautioned its shareholders that Belden had not made a formal offer and no action is required by shareholders at this time.
RuggedCom recommended its shareholders take no action until they have received further communications from RuggedCom's board.
The Concord, Ontario-based company also formed a special committee to examine the bid and solicit other proposals "to maximize shareholder value".
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