Acquisition of Keystone may face a number of roadblocks: a group of shareholders disapproves of LKQ Corp.'s purchase plan.THERE may be a few bumps in the road before the acquisition of local auto parts Auto parts are components of automobiles. They mainly are, in alphabetic order (only car specific articles or articles with car section):
Despite unanimous approval by Keystone's board, a number of shareholders have begun to voice their disapproval after LKQ LKQ Like Kind and Quality Corp., a Chicago auto parts recycler, announced this month plans to acquire Keystone, a Pomona aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. auto parts supplier, for $811 million. In a letter to Keystone Chairman Ronald Foster, a representative of shareholders with over 600,000 Keystone shares said he intends to vote against the deal because the financial terms of the acquisition were not favorable to the company's shareholders. "I am writing to express my shock and dismay at the entirely inadequate price you and the Keystone Automotive board have unanimously decided to accept for the acquisition of Keystone by LKQ Corporation," wrote Saul Rubin, portfolio manager of Rockhampton Management UK LLP LLP - Lower Layer Protocol , in the letter. On behalf of its clients, Rockhampton controls 664,825 shares, or 4 percent, of Keystone. Keystone accepted LKQ's buyout offer of $48 per share--a 10 percent premium over the opening price on July 17, the day the deal was announced--but Rubin said no offer below $75 per share would be acceptable. He said the price accepted by the board was a blow to shareholders, who received a much lower bump in stock price than is typically seen by acquired companies. Three analysts who track the company have downgraded Keystone's stock since the deal was announced, saying the price has approached their long-term estimates. But at least one of those analysts believes $75 per share is unreasonable. "There's no way that's going to happen," said Gary Prestopino, an analyst with Barrington Research Associates Inc. "I think $75 a share is way off base. At $48 a share you're paying a little bit less than 14 times EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become . That's a very fair price for Keystone." The deal is expected to close in the beginning of the fourth quarter. Staff reporter Richard Clough Sir Richard Clough (c. 1530–1570) was a merchant from Denbigh and an agent of Queen Elizabeth I of England. Clough was from a humble background, but his fortunes were improved when he was noticed, as a boy chorister in Chester Cathedral, for his remarkable singing can be reached at (323) 549-5225, ext. 251, or at rclough@labusinessjournal.com. |
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