Ferro offloading assets after rebuffing A. Schulman's buyout offer
Chemical maker Ferro Corp said it is offloading assets that cannot generate sufficient returns, a day after it rejected A. Schulman Inc's $563 million buyout offer.
The company will redeploy, divest or curtail assets, Ferro said in its fourth-quarter earnings statement.
Ferro, which sells products used in industries such as electronics and construction, also said it was reviewing its product lines to determine potential to create value and generate cash.
The Mayfield Heights, Ohio-based company on Monday rebuffed Schulman's offer, saying it was better off continuing its own strategy.
Ferro could generate more value for shareholders if they sold the company in pieces, Longbow Research analyst Dmitry Silversteyn said on Monday.
Ferro also said on Tuesday it plans to reduce operating costs by more than $50 million over the next two years.
The company said in early February it sold assets related to a shrinking business that made conductive pastes used in making solar cells to a German company for an undisclosed sum.
Ferro's fourth-quarter net loss widened to $64 million, or 74 cents per share, from $61 million, or 71 cents per share, as sales in its electronic materials business fell.
The business reported a 22 percent fall in net sales due to lower demand for solar paste products and precious metal powders and flakes for other electronics applications.
Net sales fell 8 percent to $406 million.
Ferro shares were down marginally at $6.75 in early trade on the New York Stock Exchange on Tuesday. They closed above Schulman's offer of $6.50 per share on Monday.
(Reporting by Swetha Gopinath in Bangalore; Editing by Sriraj Kalluvila)