David Tannehill, analyst with investment firm Morgan-Keegan & Co., believes Thor Industries Inc. will eventually takeover Coachmen Industries Inc., but it could take months, possibly a year.
Coachmen’s incumbent management won the shareholder vote on Thursday. According to Tannehill’s sources, the owners of 6.8 million Coachmen shares voted in favor of the management-backed slate of directors to Coachmen’s board.
Meanwhile, the owners of 5.1 million Coachmen shares withheld their votes Thursday to show their support for Thor Chairman Wade Thompson’s effort to acquire Coachmen.
There are about 15.6 million Coachmen shares outstanding.
Despite the defeat Thursday, Tannehill said, “I don’t think Wade (Thompson) will give up, the economics are too compelling.”
Tannehill agrees with Thompson that combining Thor and Coachmen would create a more valuable company. Due to economies of scale, the combined entity would be more valuable than Thor and Coachmen are now as competitors, he said.
However, Tannehill also believes Thor’s $18 a share offer, which now is actually worth closer to $19 a share, is too low.
Thor will have to raise its offer to $20 to $21 a share in order to get Coachmen’s board to agree to sell, Tannehill believes.
If a merger cannot be completed this summer, Tannehill said Thor, which owns 466,000 shares of Coachmen stock, might, late this year, nominate a slate of directors to Coachmen’s board. Thor’s nominees to the Coachmen board would then stand for election a year from now.