Upstate CEO extends purchase offer for Metalico

Adam Weitsman CEO of the Owego, New York-based scrap metal company Upstate Shredding LLC, has submitted a written proposal to the chairman, president and CEO of Cranford, New Jersey-based Metalico offering to acquire the outstanding shares of company for 78 cents per share in cash.

Weitsman, who recently acquired approximately a 12 percent stake in Metalico, says his proposal represents a 32 percent premium to the average market price of Metalico's shares over the past 30 days and a 27 percent premium to Metalico’s closing price Feb. 20, 2015.

“I am deeply disappointed by the apparent unwillingness of Metalico’s board and management to meet with me to date, despite my significant holdings in Metalico,” Weitsman says in his letter. “As a result, I have decided to publicly announce my proposal to acquire Metalico, which I believe represents a compelling opportunity for Metalico’s stockholders to obtain liquidity for their shares, while maximizing the value of their shares at a premium.”

He continues, “I strongly believe that Metalico has great potential, but do not believe it is in the best interest of stockholders for Metalico to continue as an independent company, let alone a public company, given Metalico’s long-term underperformance and poor stock price performance.”

In his letter, Weitsman says his proposal is conditioned upon the satisfactory completion of confirmatory due diligence, obtaining all material and necessary consents and approvals, including by Metalico's convertible noteholders and bank lenders, waiver of any company antitakeover provisions, including redemption of the company’s poison pill, other customary conditions for a transaction of this type and size and the execution of a definitive agreement.

Weitsman says he is prepared to open up discussions with Metalico’s convertible noteholders and bank lenders and is confident of receiving their consent for this transaction based on Upstate Shredding’s financial strength and reputation in the industry.

In response to the unsolicited offer, Metalico has retained the investment banking firm Gordian Group LLC, New York, to assist it with a review of its business strategies going forward.

Metalico says Gordian will conduct a thorough evaluation of the company and advise its board on the alternatives for Metalico’s future, including continued independence as a public corporation, combinations or joint ventures with suitable partners or investors, sales of assets and a sale of the company, including an analysis of the offer made by Weitsman.

To view Weitsman's letter to Metalico, click here.