The Coast Distribution System Inc. has rejected an unsolicited bid from Bell Industries Inc. for $7.70 per share, or around $34.1 million in cash.
Coast formed a special committee of its board of directors and engaged a finance firm after Bell made the buyout offer in December. Morgan Hill, Calif.-based Coast said the committee unanimously rejected Bell’s proposal.
“The special committee of the board, with the assistance of its financial advisor, Seven Hills Partners LLC, reviewed Bell’s proposal and concluded that it does not reflect the underlying value of the company and that a transaction with Bell is not in the best interests of the company’s stockholders,” said Thomas R. McGuire, chairman and CEO for Coast.
Bell is comprised of three business units, including the Recreational Products Group located in Eagan, Minn., which distributes aftermarket parts and accessories to the recreational vehicle and boating markets. Coast is also involved in aftermarket supply of RV and marine products.
In addition, Coast announced that it has approved a Shareholder Rights Plan and declared a dividend distribution of one stock purchase right on each outstanding share of the company’s common stock to all stockholders of record as of Feb. 15, 2006.