ST. LOUIS and MONTREAL, QUEBEC, CANADA: Shares of Miranda shot up this morning after it announced that U.S. cable manufacturer Belden had agreed to buy the company for C$17 a share. The price represents an enterprise value of approximately C$345 million, according to Belden. The all-cash deal is not subject to any financing contingency.
“Belden has sufficient cash and committed financing in place to pay for the consideration payable under the offer and associated expenses,” the company said.
The offer represented a 64 percent premium on Miranda’s C$10.39 closing price on the Toronto stock exchange Monday, though shares ballooned on the news to open at C$16.88 this morning. On a 90-trading day volume weighted average price of C$11.99 per share as of June 4, the sale price represents a 42 percent premium. Miranda’s board unanimously agreed to recommend the deal to shareholders.
Miranda announced last March that it would consider a buy-out after a rebellion by shareholders who wanted to oust certain board members. The directors responded by bringing in Tim Thorsteinson, an industry veteran of several takeovers, and by saying it was open to offers. Several were proffered, according to Miranda, and after consultation with financial and legal advisers, Belden’s was accepted.
“This is an attractive opportunity for Miranda shareholders to realize a significant premium for their shares in an all cash deal,” said Miranda president and CEO, Strath Goodship in a prepared statement. “Belden has a strong portfolio of successful businesses, proven experience with many of our broadcast customers, and a solid reputation in Canada and Montreal.”
Shares of Belden, which trade on the New York Stock Exchange, rose about 2.5 percent this morning to US$31.04, bringing market cap to US$1.41 billion, compared to Miranda’s market cap of C$226.4 million (US$217.37 million). Belden said the offer would increase its revenue from network and connectivity products from 30 to 36 percent.
“This acquisition is another step in the ongoing transformation taking place at Belden,” said John Stroup, president and CEO of Belden, also in an prepared statement. “We believe that the combined company would be a leader in one of Belden’s target market segments and would deliver considerable value for Belden customers and shareholders.”
Belden has existing operations in Montreal, Cobourg and Vancouver, Canada. It currently has “no plans for any changes to Miranda's existing operations, including its Montreal base,” the company said. Research and development and manufacturing will be retained in Montreal. No “significant changes in employment levels” are expected, Miranda said.
The agreement provides that Miranda may not solicit other offers or consider unsolicited offers by third parties. Miranda would have to pay Belden a C$19 million termination fee if the deal is not completed under certain circumstance, notwithstanding Belden’s obligation to acquire a majority of Miranda.
Belden said it “intends to commence its offer by mailing its take-over bid circular, which will be filed with the Canadian securities regulators in the days to come,” Miranda said. Miranda will likewise mail its shareholders a recommendation to accept the offer, which will be open no fewer than 35 days.
BMO Capital Markets is acting as financial advisor to Miranda, and Osler, Hoskin & Harcourt LLP is acting as legal counsel. Belden’s legal advisor is McCarthy Tétrault LLP.
~ Deborah D. McAdams
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