QUINCY, Ill.-Talks to seal a proposed $350 million buyout of Titan International Inc. by a private equity firm have been terminated as Titan´s largest shareholder continued to oppose the sale.
Titan announced April 12 the deal with One Equity Partners-an affiliate of JPMorgan Chase & Co. that offered $18 a share for Titan last October-broke down. In January, Titan said it expected the agreement to be completed by the end of February.
Instead, Quincy-based Titan said it will focus on integrating Goodyear´s North American farm tire business, which Titan bought in December. The company said it isn´t in discussions with any other party concerning a buyout of the tire and wheel maker.
Jana Partners L.L.C., a private money management firm, opposed the deal from the start. In a Dec. 16 letter to Maurice Taylor Jr., Titan´s president and CEO, Jana Managing Partner Barry Rosenstein said Titan had failed to address his concerns about the deal.
Specifically, Rosenstein said Titan´s board should either demand a higher price or offer assurances to shareholders that the $18 per share bid was the best attainable through a "full and open process."
"To date, the board has not made even a token effort to address our concerns," Rosenstein wrote in December. "The failure of the board thus far to explain their reasoning or to provide assurances that they have and will continue to make every effort to pursue the highest possible price for shareholders, combined with our continued belief that the proposed $18 per share price significantly undervalues the company, means that we will continue to oppose this transaction at the current price."
He cited the acquisition of Goodyear´s farm tire business, a strong outlook for North American agricultural equipment sales and stock price increases at Titan Europe P.LC.-in which Titan holds a minority interest-as reasons he believed the One Equity bid undervalued Titan.
Rosenstein also expressed concern about an "uncomfortably close connection" between One Equity and the tire maker.
According to Titan´s annual report, Richard Cashin Jr., a Titan director, also is a managing partner of One Equity, and Taylor was expected to participate with the equity firm.
Two other Titan directors also may have participated, the report said.
Titan said Jana Partners on April 3 announced it still opposed the transaction. That same day, Jana Partners bought nearly 4 million shares in Titan for about $64.5 million, according to Securities and Exchange Commission filings. With that purchase, Jana Partners owns 20.1 percent of Titan.
Jana Partners couldn´t be reached for comment.
Taylor said Titan´s stock recently has flirted with $18. The stock price jumped from $13.28 to $17.26 after the One Equity deal was announced last October, and since then it has stayed around $16 to $17.
"Eighteen dollars is a good price (now)," Taylor said. "If you look forward, it might be questionable."
But he said the opposition of Titan´s largest shareholder and a buyer unwilling to go higher sealed the deal´s fate.
"(Jana Partners) has the shares to block you. So what are you going to do? Just sit here and be stupid (trying to force an outcome)?" he asked rhetorically.