Shares of the provider of mission-critical flow control products and services, Circor International (NYSE: CIR) rallied in pre-market trading at the time of publishing on Wednesday after the company also received a competing bid from Arcline Investment Management, a private equity firm. Arcline has submitted a proposal to acquire Circor for $57 per share in cash.
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Arcline’s proposal represents a premium of around 12% to KKR’s bid for Circor at $51 per share and a premium of approximately 80% to CIR’s closing stock price as on June 2, 2023. Arcline’s proposal also factors in “over $2.00 per share in value leakage through termination fees that the Board has agreed with KKR despite Arcline’s active interest,” the PE firm stated in its press release.
Arcline stated in its press release that this proposal will “expire automatically if the Board does not declare it to be a “Superior Proposal” and provide to KKR a “Determination Notice” (as defined in the amended agreement and plan of merger between CIRCOR and affiliates of KKR) by no later than 8:00 pm Eastern Time on Thursday, June 29, 2023.”
According to a Reuters report, Circor has apparently rejected Arcline’s bid as there was a risk that this bid would invite more scrutiny from regulators. The report stated that another reason for Circor to reject this offer was that Arcline did not offer a full equity backstop (which KKR has done) and as such would require debt syndication.
CIR stock has performed remarkably well, soaring more than 100% year-to-date.
