Ferro Corp.’s top executive on Tuesday indicated the Mayfield Heights chemical company’s strategy to return to growth and profitability does not involve selling itself to Fairlawn-based A. Schulman Inc.
Peter Thomas, Ferro’s interim president and chief executive officer, repeated his company’s position that Schulman’s unsolicited bid is not in the best interests of Ferro and its shareholders. He made his remarks in a statement to industry analysts after Ferro reported earlier in the morning that it lost $374 million, or $4.34 per share, for fiscal 2012, including losing $63.9 million in the fourth quarter. Revenue dropped to $1.8 billion in 2012 from $2.2 billion in 2011.
Thomas and other Ferro executives did not take any questions from analysts during the conference call.
Polymer company Schulman on Monday revealed Ferro rejected an offer in February to buy the company for $6.50 a share, half in cash and half in Schulman stock, plus debt for a total of $885 million.
Schulman said in light of the Ferro board’s rejection, it was taking its offer directly to shareholders. If Ferro shareholders change their minds and agree to sell the company, the acquisition would about double the size of $2.1 billion Schulman.
“Ferro’s board, in consultation with financial and legal advisors, unanimously determined that the A. Schulman proposal is not in the best interest of shareholders and that continued execution of the company’s value-creation strategy that we outlined today will deliver greater value to our shareholders,” Thomas said in a conference call with industry analysts.
On the day when the Dow Jones industrial average closed at an all-time high, shares of Ferro fell 23 cents to $6.57. Shares of Schulman rose 32 cents to $31.51.
Ferro intends to return to profitability by shedding non-performing and non-core assets and building up parts of its business where it sees high growth potential, Thomas said.
Standard & Poor’s Ratings Services on Tuesday placed Ferro’s B+ corporate credit rating on “CreditWatch” in light of Schulman’s purchase offer.
“An upgrade is possible if a revised bid is accepted by Ferro and the acquisition results in a combined entity with a stronger business or financial profile than Ferro has currently,” S&P said in a press release. The current B+ rating also could also be maintained or downgraded as circumstances warrant, S&P said.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com