Billed as one of the few drawn-out hostile battles left on Wall Street, Moore Corp’s hostile bid for Wallace Computer Services Inc has made a few executives sweat. But at least it’s keeping the advisory teams busy.
Toronto-based Moore launched its bid for Wallace at the end of July with a $56-a-share cash offer for the Illinois-based business forms producer. Wallace’s board rejected the initial offer, supported by the company’s shareholders. Now a proxy fight is under way, which Wallace hopes to win, with help from strong earnings news.
The US firm refused to discuss the offer with Moore on the basis that its price was too low.
After the healthy results news from Wallace, Moore raised its offer to $60 a share in mid-October. The revised offer values the deal at around $1.4 bn, up from the opening bid of $1.29 bn. All signs point to a further rejection of the offer by Wallace’s board, although it’s unclear how strong its resistance will remain – especially if, as some shareholders predict, Moore raises its offer again.
Reto Braun, Moore’s chairman and CEO, has indicated that the offer was increased to avoid a prolonged proxy fight and in recognition of Wallace’s improved results.
Lining up alongside Moore in the bid battle have been New York-based proxy solicitors MacKenzie Partners, in tandem with public and investor relations agency Kekst & Co, Lazard Frres, and lawyers Chadbourne & Parke.
Defending NYSE-listed Wallace are proxy solicitors Morrow & Co, Goldman Sachs and lawyers Sidley & Austin, with communications advice coming from Hill & Knowlton.
Jeff Zilka, H&K’s national practice director based in Chicago, says his firm has been making the rounds of the major holders and writing releases, fight documents and proxy statements. ‘Wallace had done an exceptional IR job before the bid,’ says Zilka. ‘It has a shareholder base which understands the long-term strategy.’
