Multiband Rejects UniTek’s $89m/40% Premium Buyout Offer


Multiband-Unitek Leslie Brooks Suzakamo wrote yesterday about shareholder support for Multiband (NASDAQ: MBND) in pursuit of a recently revealed unsolicited $89m cash and stock purchase offer from Pennsylvania-based UniTek Global Services.

“UniTek is interested in pursuing a merger transaction with Multiband that would value Multiband at a price of approximately $4.50 for each share of outstanding Multiband common stock, with shares of Multiband’s outstanding preferred stock included on an as-converted basis. The price would be payable in the form of cash and stock, with between $1.25 and $1.85 per share in cash and the remainder in UniTek common stock.

Our offer represents a 40% premium over your closing share price on June 7, 2011 [$3.22]. We believe that your shareholders would find this price range compelling, and to that end, we are prepared to negotiate and enter into a mutually acceptable merger agreement with you,” said Peter Giacalone, Chairman of UniTek,  in a letter filed with the SEC dated June 8th, 2011.

To Suzakamo’s point, the SEC form SC 13D filed on August 4th from Andrew Marxe and David Greenhouse on behalf of AWM Investment Co. Inc. (7.7% single ‘largest stakeholder’ in Multiband), clearly favor “discussions with Unitek to negotiate the terms of a combination along the lines contained in the Unitek Letter.” It is generally acknowledged in the same letter that Multiband’s board of directors had initially decided not to move forward with UniTek.

Earlier today, Multiband CEO James Mandel fired back and reiterated the company’s position, stating that “after due consideration, [the BOD] rejected the Unitek offer due to, in part, the inadequacy of the offer’s consideration, and the financial condition and operating history of Unitek.”

UniTek, based in Blue Bell, Pa., provides engineering, management and installation services to U.S. and Canadian telecommunications, cable and satellite industries. It has 3,300 employees. UniTek Global Services last year reported a loss of $30.6 million on revenue of $402.2 million, according to Suzakamo’s report.

Headquartered in New Hope, Minnesota, Multiband provides voice, data and video systems and services to business and government clients. They are the single the largest nationwide DIRECTV master system operator in the apartment/condo market and handle around 20% of all DIRECTV’s work in single family homes.

Multiband posted a profit of $14.7 million on revenue of $265.6 million last year; most recently, the firm signed a $22m LOI to acquire WPCS International, similarly based in Pennsylvania.  The company’s stock has bounced around over the past 24 hours, trading as high as $3.74/share on the possibilities before closing at $3.36 yesterday.