Bell Industries Inc. published a letter to Coast Distribution System Inc. expressing “disappointment” in the firm’s rejection of a buyout offer and subsequent adoption of a Shareholder Rights Plan.
In its response, Bell said “the purpose of a Shareholder Rights Plan is to protect the company’s stockholders from unfair or coercive takeover proposals. It appears that the board of directors has misinterpreted our desire to enter into good-faith discussions regarding a negotiated transaction as a hostile attempt to take over the company.”
In Bell’s second proposal, it offered Coast $7.70 per share, or around $34.1 million in cash. Both companies are involved in the supply of aftermarket products to the recreational vehicle and marine industries.
Following the proposal, Coast engaged a finance firm to assist the board in its decision. On Feb. 3, the Morgan Hills, Calif.-based company said the bid was unanimously rejected.
Segundo, Calif.- based Bell, which operates its Recreational Vehicle Products Group in Eagan, Minn., said in the letter that it is “willing to consider circumstances that may justify a further increase in our offer,” adding that if Coast does not respond it will “assume that the company is not interested in engaging in discussions.”