Vista, Calif. - Directed
Electronics shareholders will be getting more money from the company's
acquisition than they originally thought.
Directed's board accepted a higher bid from
Charlesbank Capital Partners, the middle-market private equity investment firm
in May to buy the maker of car security, car audio and home audio equipment
for $3.79 to $3.80 per share in cash. The higher bid was made after Directed
received a written non-binding proposal last week from Gibson Guitar, which
offered around $4.47 per share in cash, financed totally through debt financing.
Charlesbank matched Gibson's bid by upping its per-share proposal by more than
17 percent to around $4.45 to $4.47 per share in cash, contingent on Directed's
shareholders approving the deal by Monday, June 20, at 5 p.m. ET.
DEI shareholders are meeting
today, June 20, at 1 p.m. ET to vote on the acquisition by Charlesbank.
Charlesbank deal was valued at around $285 million, including the
assumption of $183 million in debt. It was to be financed through a combination
million in equity from Charlesbank and $205 million in a senior secured credit
facility, which consists of a $175 term loan and $30 million in revolving
Directed said it went with
Charlesbank's counter offer because the "Gibson proposal presented a high
degree of uncertainty and execution risk when compared to the likelihood of
completing a transaction with Charlesbank on an expedited basis." Gibson still
had to conduct due diligence, Directed explained, and "Gibson's proposed debt
financing was subject to numerous conditions outside the control of DEI
The original acquisition proposal by
Charlesbank is the subject of two shareholder suits filed against DEI and
Charlesbank in a California Superior Court in San Diego, alleging that DEI
failed to maximize shareholder value.