By Lisa Johnston
New products on display at the American International Toy Fair, held in N
CHICAGO — Citing adverse change in net sales and earnings relative to financial projections that had been provided earlier, Cobra Electronics has terminated its tender offer for all of the outstanding shares of Lowrance Electronics, as well as the related agreement and plan of merger between the two.
"As a result of … variances from financial projections, Cobra has concluded that, under the terms of the merger agreement, there has been a material adverse change with respect to Lowrance," said Jim Bazet, Cobra's president/CEO. "The existence of a material adverse change constitutes a failure to satisfy the conditions of our tender offer for shares of Lowrance common stock. Consequently, Cobra is terminating its tender offer," Bazet said.
The tender offer, following a number of extensions this spring, had been scheduled to expire on Friday May 4.
Disappointed that Cobra was not going to proceed with the merger, Darrell Lowrance, president/CEO of Tulsa, Okla.-based Lowrance, said, "We do not believe there has been a material adverse change in our business and we remain confident in our financial condition and our products."
Cobra, which makes CB radios, radar detectors and FRS products, had announced at the Consumer Electronics Show in Las Vegas in January (TWICE, Jan. 29, p. 10) that it was looking to acquire Lowrance for $53 million in equity and assumption of debt. Cobra initially offered $8.25 in cash for each of Lowrance's 3.77 million outstanding shares. Lowrance makes SONAR products, orbital satellite receivers and GPS mapping systems.
In April, the two companies said they agreed in principle to the reduction of Cobra's offering price to $7.50 per share, lowering the purchase value to $48.3 million, including the assumption of about $20 million in debt.
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