American project manager Hill International announced today that its board had unanimously rejected an unsolicited takeover proposal from private equity firm DC Capital Partners (DCCP), which had offered to acquire Hill at a purchase price of $5.50 per share in cash.
Hill said: "After thoroughly considering DCCP’s proposal, the board determined that the proposal substantially undervalues Hill’s common stock, and therefore that acceptance of the proposal is not in the best interests of the company or its stockholders."
DCCP’s extremely inadequate offer attempts to hijack this value creation away from our existing public stockholders and put it into their private pockets– David Richter, Hill International president
Separately, Hill’s board approved the adoption of a stockholder rights plan intended to protect the firm from "coercive and opportunistic takeover attempts".Â Â
The plan offers the company a kind of "poison pill" defence against takeovers, and is also intended to ensure that decisions on corporate strategy are made by the board focused on the best interests of the company and its stockholders over the long-term "without undue pressure from coercive short-term tactics".Â Â
Under the plan, the company’s present stockholders will receive the right to buy more shares if any single shareholder acquires ownership of 15% or more of Hill’s common stock.Â Â
The amount of shares will have a market value of twice the exercise price of the right.Â Â
According to the company, the plan will not have any impact on the reported earnings per share of the company and will not change the manner in which the company’s common stock is currently traded.
Additional details about the rights plan will be included in a Form 8-K to be filed with the U.S. Securities and Exchange Commission.Â
David Richter (pictured), Hill’s president and chief executive, said: "Hill’s management team has a strategic plan in place that we believe will significantly increase stockholder value.
"We believe that DCCP’s extremely inadequate offer attempts to hijack this value creation away from our existing public stockholders and put it into their private pockets, and our board found this offer to be completely unacceptable."Â
Hill International employs 4,800 professionals in 100 offices worldwide and provides a range of consultancy services. Engineering News-Record magazine recently ranked it ninth largest construction management firm in the US.Â Â
Photograph: David Richter, Hill’s president and chief executive, called the takeover an ‘attempt to hijack value creation’ (Hill International)