Robbins Arroyo LLP: Acquisition of Jarden Corporation (JAH) by Newell Rubbermaid Inc. (NWL) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Jarden Corporation (NYSE: JAH) by Newell Rubbermaid Inc. (NYSE: NWL). On December 14, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Newell Rubbermaid will acquire Jarden. Under the terms of the agreement, Jarden shareholders will receive $21.00 in cash and 0.862 shares of Newell, the combined value of which is equivalent to $60.03 for each share of Jarden common stock.
Is the Proposed Acquisition Best for Jarden and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Jarden is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $60.03 merger consideration represents a premium of only 14% based on Jarden’s closing price on December 11, 2015. This premium is significantly below the average one day premium of nearly 36.7% for comparable transactions within the past three years. Further, the $60.00 merger consideration is significantly below the target prices set by multiple analysts in the past several months, ranging from $64.00 set by analysts at CJS Securities and D.A. Davidson & Co. to $62 .00 set by an analyst at JP Morgan. In the last three years, Jarden traded as high as $68.96 on November 21, 2014, and most recently traded above the merger consideration – at $68.54 – on November 24, 2015.
On October 29, 2015, Jarden reported strong earnings results for its third quarter 2015. Organic net sales grew 6% or $128 million in the third quarter of 2015. Net sales were $2.3 billion for the third quarter 2015, up 10% compared to the same period in 2014. Net income was $120 million compared to $109 million for the previous period, also a 10% increase. Jarden beat consensus analyst estimates for sales in the last four quarters. In commenting on these results, Jarden Executive Chairman Martin E. Franklin remarked, “We are pleased to announce another quarter of record net sales and record segment earnings. Despite the continuing macro foreign exchange headwinds, the diversity and strength of our businesses has allowed us to continue to produce strong financial results. Jarden’s authentic brands, supported by innovation and a robust operational platform, continue to drive our performance and value creation. We look forward to completing our acquisition of Jostens in early November and we expect Jostens to be a meaningful addition to our portfolio, strengthening Jarden’s overall financial position.” Jarden’s Chief Executive Officer James E. Lillie also commented, “We continue to see very positive momentum in our year to date and quarterly results as well as in our fourth quarter and 2016 forecast.”
In light of these facts, Robbins Arroyo LLP is examining Jarden’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Jarden shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Jarden shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.