Large Jacuzzi Brands (JJZ) Holder Southeastern Asset "Vehemently Oppose" Buyout Deal
In an amended 13D filing on Jacuzzi Brands Inc. (NYSE: JJZ), 23.6% holder Southeastern Asset Management responsed to today's Apollo Management buyout news. Southeastern said, "Our initial reaction to today's announcement is that we vehemently oppose this transaction, because the $12.50 price is completely insufficient."
The firm also said, "The Board began a process of exploring options at an inopportune time, when the results of the Bath division were far below what it's capable of producing. Now that Al Marini is in place as CEO, the company is finally in position to fix Bath and eliminate significant unnecessary corporate expenses. The Zurn division has a tremendous long-term outlook and is worth more than this transaction implies.
We would much rather proceed as an independent company under Al Marini, rather than hand over future profits to a very smart group at a bad time. There is a huge opportunity to fix Bath, cut corporate expenses, and to continue to grow Zurn. We fear that the Board, who owns very little stock and has lived through many different mistakes and unpleasant episodes, took a bid despite a low price because they wanted to wash their hands of the whole thing. The asbestos liability is one that we believe to be a non-issue, and the buyers are apparently not too worried about it either.
Once we receive the proxy materials we will review the offer and process in fuller detail. While our actions are limited somewhat by the terms of the Standstill Agreement between Southeastern and Jacuzzi (see Exhibit 10.48 to Jacuzzi Brands 10K filed on December 24, 2002 and Jacuzzi Brands 8K filed on August 12, 2005), we currently intend to vote against this transaction with the maximum percentage permitted under that Agreement."