* Andrew Corp. terminates merger agreement with ADC and rejects bid from CommScope
Last week was a busy one for satellite communications vendor Andrew Corp.
The coveted company terminated its merger agreement with ADC Telecommunications and rejected the unsolicited $1.7 billion rival bid from CommScope.
Andrew and ADC said they believe current market considerations raised “serious questions” about the ability to obtain necessary shareholder approval. Andrew has agreed to pay ADC a termination fee of $10 million and another $65 million in the event Andrew merges with another company within 12 months.
ADC announced its intention to acquire Andrew, a maker of wireless satellite communications systems, for $2 billion in stock on May 31. Since that time, ADC’s market value has plummeted, sharply reducing the value of its offer for Andrew.
That prompted CommScope to make its all cash, $9.50 per share offer two weeks ago. But Andrew’s board rejected it, concluding the proposal is “wholly inadequate and not in the best interests of its shareholders.”
“We are disappointed that Andrew has decided to reject our proposal,” CommScope said in a prepared statement.
CommScope offered Andrew a 36% premium over the $6.97 per share conditions from ADC, and a 20% premium over Andrew’s per share closing price of $7.89 on Aug. 4, the last trading day before CommScope’s bid was made public.
“After careful consideration with our advisors, CommScope has decided not to pursue its proposal to acquire Andrew Corp. at the present time.”
