Multiband Stock Jumps, Falls on News of Possible Sale
While U.S. stocks plunged Thursday-marking the worst day for the market since the height of the financial crisis in 2008-New Hope-based Multiband Corporation bucked the trend and saw its stock price climb 62 cents, or 23 percent, to $3.36. (Monday brought an even worse day for U.S. stocks.)
Why did the company's stock price soar while the Dow Jones industrial average plummeted 512 points, or 4.3 percent? Because news broke that it had received a buyout offer.
The unsolicited offer was revealed in a regulatory document filed Thursday by Austin Marxe and David Greenhouse, who cited a June 8 letter from Blue Bell, Pennsylvania-based UniTek Global Services, which offered to buy Multiband. The proposed deal valued Multiband at about $4.50 per share-a 40 percent premium over the June 7 closing price, according to documents filed with the U.S. Securities and Exchange Commission (SEC).
Marxe and Greenhouse, the controlling principals of AWM Investment Company, Inc., hold a 7.7 percent stake in Multiband. They said that UniTek's offer was in the form of cash and stock-between $1.25 and $1.85 per share in cash and the remainder in UniTek common stock.
The SEC filing indicated that Multiband's directors had decided not to pursue the offer, but Marxe and Greenhouse urged the board to “immediately begin discussions with Unitek,” and said that Unitek may be willing to “significantly enhance the terms” of its original offer.
But by Friday, it appeared that Multiband, which bills itself as one of the largest installers of DirecTV services in the country, had indeed rejected the deal.
In an SEC document filed Friday, the company wrote the following: “The offer was unsolicited and the company is not for sale. At that time, Multiband's board of directors, after due consideration, rejected the Unitek offer due to, in part, the inadequacy of the offer's consideration, and the financial condition and operating history of Unitek.”
The company's stock closed on Friday down about 10 percent to $3.02 per share.
Multiband, which was founded in 1993, employs 3,200 full-time employees, according to its Web site. It provides voice, data, and video services to multi-dwelling unit and single-family home customers.