TORONTO -- Budcan Holdings Inc., a subsidiary of U.S. automotive manufacturer ThyssenKrupp Budd Co., will make an all-cash bid to take ThyssenKrupp Budd Canada Inc. private, the company said on Monday.
Budcan, which currently owns just over 77 percent of Budd Canada, will offer Canadian $9.00 for each outstanding share it does not already own, in a deal worth Canadian $7.7 million ($6.5 million). The offer would be financed out of existing cash resources.
"Basically, we feel we can more effectively adjust all of the capital and operating challenges and really eliminate the costs related to maintaining a public company, because there are such few shares out there," said Thomas McDonald, ThyssenKrupp Budd Co.executive vice president.
The company said an independent committee was formed by Budd Canada's Board of Directors to consider the offer and supervise the share valuation.
Fidelity Management & Research Company owns about 12.3 percent of the outstanding common shares of Budd Canada, or some 54 percent of the stake held by minority shareholders.
ThyssenKrupp Budd, a subsidiary of Germany-based ThyssenKrupp, said it had not discussed terms of the offer with Fidelity and it did not know how Fidelity would respond to the offer.
ThyssenKrupp Budd Canada also reported a net loss of Canadian $10.4 million ($8.8 million), or Canadian $2.75 a share for the fourth quarter to Sept. 30. This compared with a net loss of Canadian $6.8 million, or Canadian $1.80 a share for the same quarter a year ago.
The company, which makes chassis components and frames for light-trucks and sport utility vehicles, said sales fell to Canadian $113.5 million from Canadian $142.6 million.
It sees a further decline in sales for 2005 amid a further slowdown in the U.S. economy, reduced demand for cars requiring full frames, and phasing out production of frames for Mercedes-Benz cars.
It said the impact of poor sales in the second half more than offset profits in the first half of the year.