A Schulman urges Ferro to reconsider buyout offer

AKRON, Ohio (AP) — A. Schulman Inc., a supplier of plastic compounds and resins, said Monday that Ferro Corp. has rejected its $563 million cash-and-stock offer but urged the specialty chemical company to reconsider its position.

Ferro's stock jumped $1.74, or 33.5 percent, to $6.94 in afternoon trading — above the offered price of $6.50 per share. The shares touched $6.95 earlier in the session, their highest point in more than a year.

Schulman said that it had offered $3.25 per share in cash and $3.25 of Schulman stock for each share of Ferro, which based in Mayfield Heights, Ohio,

Ferro currently has about 86.5 million outstanding shares, according to FactSet. The offer is a 25 percent premium to Ferro's closing price of $5.20 on Friday.

Schulman put the total value of the deal at $855 million, including debt. It said that its offer was based on publicly available information about Ferro and that it would consider adjusting its offer if it were able to get greater insight into the company's operations.

Schulman said it first contacted Ferro in November, and sent a letter to the company last month declaring its "strong intent" in acquiring the business. Schulman said that Ferro rejected the bid, saying it believes the company should stay independent.

Ferro confirmed Monday that it rejected the acquisition offer, saying its board reached the decision in consultation with its financial and legal advisers. The company said it was determined that the bid was not in the best interests of its shareholders.

Schulman President and CEO Joseph Gingo said in a statement that the company would welcome the chance to talk to Ferro's board and management.

Shares of Schulman fell 17 cents to $30.95 in afternoon trading Monday.