Originally Posted by
Swampy
So what's the deal? Metalico selling to a Chinese company at $.60 / share?
That is the current offer (also included is paying off metalico's debt, not to mention a 3 year contract for carlos valued at over $1.3 million) that has been accepted by the Board of Directors (Carlos included).
In my opinion, Carlos has done nothing but screw the shareholders. I'll explain in a minute, but first let me say that I'm not going to pass judgement here about wether any or all of the offers were adequate. That is for individual shareholders to determine.
Now, here is where Carlos got the vasaline out for everyone. Adam Weitsman's (AW) first offer was $0.78 per share. There were roughly 58 million shares outstanding. This was roughly a $45.25 million dollar offer (plus assume debt). Most likely no job for Carlos. Carlos ignores the offer, hires Gordian at a cost of 1 million shares, issues another 14 million shares, which dilutes everyone's shares. There are know 73 million shares outstanding. In addition, Metalico passes out the posion pill, which effectively doesn't allow AW to aquire more than 15% of the company and takes away shareholders rights to call a special shareholder meeting and remove or appoint anyone to the board. This leaves all control with the current board of directors. Metalico does not respond to AW's offer and has another bad quarter, losing millions. AW lowers his offer. Carlos and crew accept offer from Chinese company at 60 cents per share. This is roughly a $44 million dollar offer (plus assumed debt). Now add in Carlos's 3 year contract at $1.3 million and we have AW's original offer. The only ones making any money here is Carlos. Shareholders lost over 20% from AW's offer. Now AW doesn't totally loss out, he stands to make $1 million on his shares if the offer goes thru, but then will have the Chinese company as competion, which should be a little stiffer than Carlos and crew. In my opinion, Carlos would have done anything to avoid selling to AW.
The thing to remember is "It ain't over until the fat lady sings." Sale has to be approved by a majority of the shareholders at a yet to be schedule shareholder meeting. In addition, there are about 8 law firms investigating the Metalico Board for not fullfilling their fiduciary obligations and accepting an offer that was too low (1 wall street analyst apparently put a 1 year price target of $1.00, which ain't going to happen with Carlos at the helm).
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