Ferro Corporation (NYSE:FOE) Investor Files Lawsuit Over Rejected Takeover Bid

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Company Name(s): 
Ferro
Case Name: 
Ferro Shareholder Derivative Lawsuit 04/08/2013
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: FOE
Lawsuit Overview
Type of Lawsuit: 
Shareholder Derivative Action
Date Filed: 
04/08/2013
Summary: 

April 9, 2013 (Shareholders Foundation ) - An investor who holds NYSE:FOE shares filed a lawsuit over Ferro Corporation’s refusal to accept a takeover of from A. Schulman Inc.

According to the complaint A. Schulman Inc. has tried for months to initiate productive merger discussions with Ferro Corporation, but has been shot down by Ferro Corporation’s board of directors.
A. Schulman Inc. tendered its first offer in November 2012. In February 2013 Schulman first approached Ferro Corporation again. Then on March 4, 2013, Ferro Corporation confirmed that its Board of Directors had previously received and rejected an unsolicited proposal from A. Schulman, Inc. (Nasdaq: SHLM) to acquire all of the outstanding shares of Ferro common stock for $6.50 per share in cash and stock.

However, the plaintiff claims that the board of directors are stubbornly refusing any purchase offers despite poor financial performance.

Indeed, Ferro Corporation reported that its annual Revenue declined from over $2.15 billion in 2011 to $1.76 billion in 2012 and its Net Income of $4.40 million in 2011 turned into a Net Loss of $374.27 million in 2012. In addition, shares of Ferro Corporation (NYSE:FOE) declined from as high as $16.53 per share in April 2011 to as low as $2.46 per share in November 2012.

The plaintiff says that rather than defendants considering the premium being offered to NYSE:FOE stockholders, or negotiating for mutually-agreeable higher bid, or using A. Schulman's offer to solicit and explore other potential bidders, defendants instead rejected all efforts by A. Schulman Inc. to engage in discussions and negotiations about a possible acquisition of Ferro Corporation.