Anixter International Inc., a global distributor of Network & Security Solutions, Electrical & Electronic Solutions and Utility Power Solutions, has agreed to a further amendment and restatement of the Amended Merger Agreement, the “Second Amended Merger Agreement,” with Clayton, Dubilier & Rice LLC (“CD&R”) to increase the per-share consideration payable to Anixter’s shareholders to $93.50 per share in cash, from $86.00 per share in cash and a $2.50 contingent value right upon the occurrence of certain events. The transaction is now valued at approximately $4.3 billion.
The revised per-share consideration represents a premium of approximately 31% over Anixter’s closing price on October 29, 2019, and a premium of approximately 47% over the 90-day volume-weighted average price of Anixter’s common stock for the period ended October 29, 2019.
Amended merger agreement
The Second Amended Merger Agreement does not include the contingent value right
The Second Amended Merger Agreement, amends and restates in its entirety the Amended Merger Agreement, which was announced on December 23 and valued at approximately $4 billion. The Second Amended Merger Agreement does not include the contingent value right. The voting agreement pursuant to which certain stockholders of Anixter, including entities associated with Sam Zell, have agreed, among other things, to vote their shares of Anixter common stock in favour of the merger, remains in effect with respect to the Second Amended Merger Agreement.
Sam Zell, Chairman of the Anixter Board of Directors, commented, “In evaluating the new proposal from CD&R, the Board carefully considered the value and risk profile of WESCO’s offer comprising cash, WESCO common stock and a new series of WESCO preferred stock, for which there is no established market or trading price. The Board has unanimously concluded that CD&R’s improved all-cash proposal is superior to WESCO’s offer.”
CD&R has the right to delay the closing
The transaction is subject to the approval of Anixter’s stockholders and other customary closing conditions. The required antitrust waiting periods have expired, or approvals or clearances have otherwise been obtained, in the United States, Canada, Mexico, Costa Rica and Turkey.
Anixter may respond to an unsolicited proposal that is reasonably likely to result in a superior proposal
The transaction remains conditioned on approvals or clearances in the European Union and Russia, which are expected to be received by February. Although the closing could occur as early as February, under the Second Amended Merger Agreement, CD&R has the right to delay the closing until a date no later than September 30th.
Under the terms of the Second Amended Merger Agreement, Anixter may, subject to the provisions of the Second Amended Merger Agreement, respond to an unsolicited proposal that is reasonably likely to result in a superior proposal. In addition, Anixter may continue to engage in discussions with WESCO International, Inc., which remains an Excluded Party (as defined in the Second Amended Merger Agreement). Anixter does not intend to disclose developments with respect to any such unsolicited proposal unless and until it determines it is appropriate to do so.
Centerview Partners LLC is serving as lead financial advisor, Wells Fargo Securities, LLC is also serving as financial advisor and Sidley Austin LLP is serving as legal advisor to Anixter in connection with the transaction. Neal, Gerber & Eisenberg LLP is serving as legal advisor to the stockholders party to the voting agreement. BofA Securities, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC and Credit Suisse are serving as financial advisors to CD&R, and Debevoise & Plimpton LLP is serving as legal advisor to CD&R.