CommScope submits competitive bid for Andrew Corp.
CommScope said its offer, at $9.50 per share, is valued at $1.7 billion in cash. It said the ADC per share value to Andrew shareholders would be $6.97, based on the closing price of ADC shares on Aug. 4, 2006.
The competing bid caused Andrew shares to surge 22.69 percent to $9.68 apiece in mid-day trading Monday.
CommScope noted that its proposal is a 20 percent premium over the $7.89 closing price of Andrew's shares on Aug. 4. Its offer also includes the assumption of about $186 million in Andrew net debt.
CommScope said its proposal will expire on Friday, Aug. 11, 2006, at 5 p.m. Eastern.
"We are going to be evaluating the offer from CommScope that we just received this morning, and we will respond at the appropriate time," an Andrew spokesman said.
ADC officials were not available for comment by Monday's deadline.
CommScope Chairman & CEO Frank Drendel, in a letter to Andrew Corp. President Ralph Faison, called his company's proposed deal "a compelling strategic fit that will build upon Andrew's and CommScope's highly complementary operating assets."We believe our proposal is superior both financially and strategically, to the offer contemplated in your merger agreement with ADC Telecommunications Inc."
CommScope specializes in "last mile" cable and connectivity equipment, and is the world's largest manufacturer of coax for hybrid/fiber coax systems. It has also widened its portfolio in recent years with products that extend HFC plant wirelessly. Andrew, which reported sales of $1.9 billion last year, manufactures and supplies a wide range of communications equipment, including gear for wireless, land mobile radar, cellular, broadcast and radar applications.
CommScope, based on a review of publicly available information, claimed a combination with Andrews would generate annual cost savings of $30 to $50 million in the first full year after the deal is closed, and hit $70 million to $90 million in the second.