RealTime IT News

CommScope Offers Rival $1.7B For Andrew

In a bid to ruin ADC's plan to acquire Andrew , CommScope announced a $1.7 billion all-cash offer for the wireless communications equipment maker.

The rival offer builds on growing stockholder unrest over a $2 billion all-stock acquisition agreement between ADC and Andrew board of directors.

Since that time, ADC's stock has fallen, giving rise to CommScope's entry.

In a letter to Andrew CEO Ralph Faison, CommScope head Frank Drendel outlined his proposal, including buying 160 million shares of Andrew stock at $9.50 per share, as well as assuming $186 million in debt from the Westchester, Ill., company.

"We note that since the announcement of the ADC-Andrew merger, ADC's share price has declined approximately 45 percent," wrote Drendel.

Uncertainty from the proposed merger with ADC would result in Andrew shareholders receiving only $6.97 per share, according to the letter.

Talking with reporters during a conference call, Drendel described the new bid as "a friendly offer, it's a superior offer and we are ready to move."

CommScope, which makes cables for telecom companies, including carriers and enterprises, sees acquiring Andrew as enabling it to lead the last-mile sector.

Andrews is known for its antenna and cable products, according to CommScope.

"The 'last-mile' provides the final link between broadband and content-rich services and the end-user, including homes, business enterprises and wireless customers," Drendel said in a statement.

Drendel gave Andrew until Friday to reply to the offer.

An Andrew spokesperson told internetnews.com the company had just received the proposal and would need time to assess the offer. ADC could not be reached for comment.

Financing for the proposed acquisition would come from cash on hand and debt financing, according to the company. Bank of America and Wachovia Bank have agreed to finance the transaction.

CommScope said its proposal would save the two companies $90 million during the second year of the agreement.

COO Brian Garrett told reporters much of the savings could come from closing 35 redundant factories.

In July, CommScope reported a double-digit, third-quarter jump in sales and profit. The cable equipment maker said it made $46.6 million on $412 million in sales.