The Board of Directors of Hardinge Inc. unanimously rejected the unsolicited proposal from Industrias Romi S.A. of Brazil to acquire all of Hardinge's outstanding shares for $8.00 per share as grossly inadequate, opportunistic and not in the best interests of Hardinge and its shareholders.
The following letter has been sent to Industrias Romi S.A.
February 18, 2010
Livaldo Aguiar dos Santos
Chief Executive Officer
Industrias Romi S.A.
Avenida Perola Byington, 56
Santa Barbara d'Oeste -SP - Brazil
CEP 13453-900
Dear Mr. dos Santos:
The Board of Directors of Hardinge, with the assistance of its financial and legal advisors, has carefully considered your unsolicited proposal to acquire Hardinge. Based on this thorough examination, our Board concluded that your offer is grossly inadequate, opportunistic and not in the best interests of Hardinge and its shareholders.
As you know, including from our prior communications, Hardinge's business and share price have been depressed by the extreme global economic downturn and financial crisis. We understand why it makes sense for Romi to attempt to acquire Hardinge at the bottom of the economic cycle, and at a time when the economic recovery is in sight (especially since you know the machine tool industry trails broader economic trends). However, we do not believe it is advisable for Hardinge to pursue a sale of the company at this time, and most certainly not for the grossly inadequate price you are offering. Hardinge is well capitalized to emerge from this economic cycle, and is well-positioned to benefit strongly as our industry participates in the global economic recovery.
Sincerely,
/s/ Kyle H. Seymour /s/ Richard L. Simons
Kyle H. Seymour Richard L. Simons
Non-Executive Chairman of the Board President & Chief Executive Officer
Shareholder Rights Plan
Hardinge also announced that its Board of Directors approved the adoption of a one-year Shareholder Rights Plan designed to ensure that all stockholders of Hardinge will receive fair and equal treatment in a takeover bid and to enable its stockholders to realize the full long-term value of their investment.
The rights will be distributed as a non-taxable dividend on March 1, 2010, payable to stockholders of record on that date, and will expire in one year. The rights will be exercisable only if a person or group acquires 20 percent or more of Hardinge's Common Stock. Initially each right will entitle stockholders to buy one one-hundredth of a share of a new series of Series B Preferred Stock at an exercise price of $35.00. If a person triggers the rights plan by acquiring 20 percent or more of Hardinge's Common Stock, all rights holders except the buyer who triggered the plan will be entitled to acquire, at the rights' then-current exercise price, a number of shares of Hardinge's Common Stock having a market value of twice such price. The effect will be to discourage acquisitions of more than 20 percent of Hardinge's Common Stock without negotiations with the Board. In addition, if Hardinge Inc. is acquired in a merger or other business combination transaction after a person has acquired 20% or more of the Company's outstanding Common Stock, each right will entitle its holder (other than the acquiring person) to purchase, the acquiring company's common shares at a discount.
The rights will trade with Hardinge's Common Stock, unless and until the Rights Plan is triggered. The rights distribution is not taxable to the stockholders. Hardinge's Board of Directors may amend the Rights Plan at any time or redeem the rights for one cent per right prior to the time the rights are triggered. Additional details regarding the Rights Plan will be outlined in a summary to be mailed to all stockholders following the record date.