Wesco Not Going Quietly, Submits Improved Buyout Bid for Anixter

Wesco raised its buyout bid for rival wholesale distributor Anixter to $97 a share in cash and stock, up from $93.50 a share.

PITTSBURGH — The bidding war for Anixter (NYSE: AXE) continues with Wesco International still in play to acquire its rival distributor.

On Jan. 4, Wesco (NYSE: WCC) increased its initial offer for Anixter just one day after Anixter said it accepted an enhanced offer by Clayton, Dubilier and Rice LLC (CD&R). CB&R increased its per-share bid to $93.50 in cash from $86 in cash and a $2.50 contingent value right upon the occurrence of certain events.

The revised offer represented a ~31% premium over Anixter’s closing price on Oct. 29 when it initially agreed to be acquired for $3.8 billion by the private investment firm.

Wesco countered by submitting a revised proposal to acquire Anixter for $97 per share in cash and stock. Under terms of Wesco’s new bid, Anixter shareholders would receive $63 in cash and 0.2397 Wesco common shares, along with $19.89 of newly created Wesco perpetual preferred stock for every Anixter share they own. The preferred stock is expected to have a fixed market rate of about 9.25%, according to Wesco’s announcement.

The revised proposal improves upon Wesco’s Dec. 26 proposal buyout bid of $93.50 a share, which included $63 a share in cash and the rest in Wesco stock.

In the announcement, Wesco Chairman, President and CEO John Engel states: “Wesco is uniquely positioned to deliver immediate value to Anixter stockholders and provide the ability to participate in the significant upside potential of a combined organization. Together, we would create a premier electrical and data communications distribution company, with an enhanced strategic profile and competitiveness, generating significant expected synergies and earnings accretion. We continue to strongly believe this transformative combination is in the best interests of both companies’ stockholders and that our latest proposal represents a superior company proposal compared to Anixter’s current agreement with CD&R.”

Wesco, based here, said it has obtained debt financing from Barclays for the cash portion of the transaction. The company said it will fund the required cash consideration with a combination of long‐term debt financing and additional equity or equity‐content securities.

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Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.

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