Denali Investors Issues White Paper on The Shaw Group's (SHAW) Merger with CBI
NEW YORK, Oct. 17, 2012 /PRNewswire/ -- Denali Investors ("Denali") is issuing a White Paper to SHAW's shareholders relating to SHAW's recent agreement to sell itself to Chicago Bridge & Iron Company N.V. ("CBI").
A full copy of the White Paper can be found here:
SHAW - Demanding Fair Value & a Proper Sale Process - 2012 10 17.pdf
In addition, please visit www.ShawFairValue.com for further information.
The following are highlights of Denali Investors' opinions as set forth in more detail in its White Paper presentation:
- The current deal with CBI at $46 per share is a sweetheart transaction for CBI allowing them to steal SHAW on the cheap without a proper auction process or an appropriate control premium.
- The premature timing, depressed valuation, limited sale process, and total lack of communication of the deal is explained by our learning that a major conflict of interest exists with the Chairman's likely Louisiana senatorial (2014) or gubernatorial (2015) campaign.
- Management and Board:
1) did not negotiate a go-shop period to solicit competitive offers,
2) did not form a special committee for the sale,
3) did not hold a customary conference call,
4) did not release presentation materials about the transaction,
5) did not file customary proxy materials, and
6) has refused to communicate with investors, analysts, and journalists.
- There is ample evidence that the deal price is not the fair price that shareholders deserve given the:
1) strength of SHAW's underlying business,
2) massively impactful unwind of the substantial Westinghouse investment, and
3) recent sale of the problematic and volatile E&C segment.
- Due to SHAW's high 75% supermajority voting threshold that excludes 5% and greater holders, we estimate that ONLY 13% to 17% of shareholders voting against the unfair terms will block the current deal.
- We believe SHAW should be valued at $50 to $70 per share as a going concern and $60 to $85 per share including a control premium.
- We will continue to take all actions to protect our investment which include 1) proxy solicitors/advisors, 2) legal counsel, 3) appraisal rights counsel, and 4) independent inspector of elections.
We encourage fellow shareholders to also vote against the deal, share your concerns with SHAW, and demand to have SHAW form an independent special committee and hire independent advisors to run a proper auction to maximize shareholder value.
SOURCE Denali Investors, LLC