GLENVIEW, Ill. — Anixter Int’l (NYSE: AXE) said Thursday a new $100 per share cash-and-stock offer from Wesco Int’l was determined to be a “superior company proposal” over rival bidder Clayton, Dubilier & Rice (CD&R).
The revised offer by Wesco (NYSE: WCC) reflects an enterprise value of approximately $4.5 billion including net debt. The proposed agreement consists of $70 per share in cash, 0.2397 shares of Wesco common stock, and $15.89 per share of WESCO perpetual preferred stock.
CD&R will have five business days to negotiate a counter offer, according to Anixter’s announcement.
“After careful review and consideration and consultation with our financial and legal advisers, the Board of Anixter has determined that the current Wesco offer is superior to the existing CD&R agreement,” states Sam Zell, chairman of Anixter.
The announcement included the following details of Wesco’s offer:
The cash portion of the merger consideration will be increased by up to $2.82 to the extent the value of the Wesco common stock consideration, calculated using a volume weighted average before closing, declines below $14.11 per share, providing Anixter stockholders with 20% down-side protection based on Wesco’s closing price on January 2, 2020. Anixter stockholders would receive the benefit of any increase in the value of the Wesco common stock consideration above $14.11 per share. Based on the closing price on January 8, 2020, the total consideration would be $100.16.
Under its initial agreement with CD&R, should Anixter chose to consummate a deal with Wesco it would be required to pay a $100 million termination fee to CD&R. However, Wesco has agreed to pay the termination fee on Anixter’s behalf, according to the announcement.
It would appear the bidding war for Anixter may be drawing to a conclusion. On Jan. 3, Wesco increased its bid for the company to a $97 per share cash-and-stock offer following Anixter’s decision to accept a $93.50 per share all-cash offer from CD&R only days earlier.
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