In March, Deason and Cerberus agreed to work solely with each other to negotiate a takeover of ACS. The two tabled an initial offer of $59.25 per share, which was increased to $62 per share in April amid reports that an ACS special committee had refused to negotiate or allow any due diligence to be undertaken.
ACS said that following suspension of the pact between Deason and Cerberus, it would be soliciting indications of interest in a transaction, and allowing interested parties, including Cerberus, to conduct due diligence. The process, scheduled to begin on June 16 and continue until August 9, will be overseen by an ACS special committee along with financial advisers Lazard Freres.
ACS added that it would reimburse Cerberus for up to $7.5m in expenses incurred in connection with its bid. Should it agree to be acquired by another company, ACS will pay Cerberus a further $15m, provided the investment group had not withdrawn or reduced its offer.
Our View
It is now nearly three months since ACS’s founder Darwin Deason launched a bid to take the company private, yet a deal looks as far away as ever. ACS will now spend the next two months encouraging bids from other potential buyers, as well as continuing to consider the offer on the table from Deason and Cerberus.
In truth, there has been uncertainty around ACS since January 2006, when reports suggested that the company was on the verge of selling up to a group of private equity firms led by the Texas Pacific Group and including Silver Lake Partners and the Blackstone Group. ACS terminated these negotiations, however, and all talk of a possible sale evaporated until Deason stepped in.
It is widely assumed that Deason’s offer is lower than the private equity bid that was rejected by ACS last year, and the company is mindful of its obligations to maximize value for shareholders. The most likely outcome of the saga remains a takeover by Deason and Cerberus, but they may have to increase their bid for a third time to make sure of success.
