The fate of Motorola’s
$30 million all-cash buyout bid for Next Level Communications
hung on the balance with an independent committee promising to deliver its recommendation to shareholders by February 10.
Schaumburg, Ill.-based Motorola has put together a $1.04 per share offer for all the outstanding shares of Next Level that it does not already own but the independent committee is urging stockholders to “take no action with respect to the tender offer” until a complete evaluation is completed and a recommendation is made.
The Next Level committee has hired Latham & Watkins and Richards, Layton & Finger as legal counsel, Morgan Stanley as financial advisor and MacKenzie Partners, Inc. as stockholder relations advisor.
“The Independent Committee strongly recommends that Next Level stockholders defer making a determination whether to accept or reject Motorola’s unsolicited tender offer until reading the Board’s solicitation/recommendation statement, which shall be available on or before February 10, 2003,” it said in a statement, promising to advise on whether to accept or reject Motorola’s tender offer.
Motorola’s buyout bid is designed to allay concerns about Next Level’s finances, which has suffered through a lagging demand for its very-high-speed DSL equipment, which allows carriers to transmit broadband content over existing phone systems.
The telecommunications equipment maker first acquired its Next Level stake through the purchase of General Instrument Corp. in January 2000. At the time, Motorola was making buys (as well as significant venture capital investments) to expand its presence and profits beyond handsets.
The proposed purchase price represents a 14.4 percent premium over Next Level’s recent closing price and a a 28.6 percent bump over the average closing price for the last 90 trading days. If accepted, Motorola expects the deal to be completed in the first quarter.