On Nov. 13, Henry Bros. Electronics Inc. (HBE), Fair Lawn, N.J., and Kratos Defense & Security Solutions Inc., San Diego, Calif., made an amendment to their previously announced merger agreement. Per the amendment, the merger consideration increased from $7.00 per share to $8.20 per share in cash and the transaction termination fee was increased to $2,180,582.
According to HBE’s statement, this amendment followed a third-party bid to acquire all outstanding shares of the company. During the contractual 40-day go-shop period, HBE received a non-binding proposal from Diebold Inc., North Canton, Ohio, of $8.00 per share in cash. The go-shop period expired at midnight EST on Nov. 14, but HBE stated that under the terms of the agreement with Kratos, “HBE is permitted to continue to have negotiations and discussions with Diebold with respect to its acquisition proposal.”
“There was at least enough of an interest to enable to extend communications beyond the end of the go-shop period,” Jim Henry, CEO of HBE told SDM earlier today. While Henry confirms that there is ongoing communication with Diebold, he adds, “We’re on target for closing with Kratos for December 9. What would have to happen for there to be any interruption in the time frame is there would have to be a firm offer from this third party that was viewed by the board as a superior offer. If that happens and Kratos matches it, we stay on schedule. If that happens and they do not, that would change the schedule.”
Kratos announced today that a supplement to proxy statement was mailed to shareholders of HBE yesterday, Nov. 17, and that the date of HBE’s shareholder meeting to vote on the proposed transaction was not changed with the Nov. 13 amendment. The company stated that the Henry Bros. board of directors has unanimously recommended a vote “for” adoption of the revised merger agreement between Kratos and HBE.
According to the statement issued by HBE on Monday, Nov. 15, “During the go-shop period, Imperial Capital contacted 117 potential transaction partners at the request of and on behalf of HBE. Of the 117 parties contacted, 11 entered into confidentiality agreements and reviewed non-public information regarding HBE. As a result of the ‘go-shop’ activities, on Nov. 9, 2010, a third party submitted a non-binding proposal to acquire all of the outstanding shares of HBE common stock for $8.00 per share in cash.”
Further proposals from Diebold are subject to, among other things, completion of due diligence review and negotiating the terms of a definitive agreement.
Jim Henry Confirms with SDM that Closing with Kratos is on Target
November 18, 2010