DeWITT — Discovery Group I, LLC of Chicago has sent a letter to the board of directors at Anaren, Inc. (NASDAQ: ANEN) of DeWitt, urging the board to “expeditiously pursue the sale of Anaren.”
Details of the letter were included in a Discovery Group news release that was part of a filing today with the U.S. Securities and Exchange Commission (SEC).
Discovery Group manages a fund that owns six percent of Anaren shares, according to an April 8 SEC filing.
Discovery Group sent the letter as Anaren’s independent committee reviews and evaluates a purchase offer from another investor — Orlando, Fla.–based Vintage Capital Management, LLC.
On April 15, Vintage Capital, which already owns just over one-eighth of Anaren’s shares, sent the DeWitt–based high-tech manufacturer a letter offering to buy all its shares for $23 in cash per share. The unsolicited, non-binding offer values Anaren at more than $300 million.
In its letter, Discovery called on the Anaren board to negotiate with Vintage Capital and also asked the board’s independent committee to simultaneously seek alternative buyers since, according to Discovery’s letter, “a sale to a strategic buyer could reasonably be expected to achieve a value in the range of $26 to $30 per share.”
“Anaren is a high quality company that is sorely overlooked by the equity market. Much greater value can be achieved for all shareholders if Anaren were to pursue and consummate a sale to one of the many strategic parties that our industry due diligence suggests are interested in the potential synergies with Anaren,” Michael Murphy, managing partner of Discovery Group, said in the firm’s news release.
However, Discovery is concerned that the Anaren board is “reluctant to sell the company,” according to the news release.
“We are worried that the independent committee is narrowly considering only the Vintage offer. Our fear is that the Board is positioning itself to simply dismiss the offer as inadequate to avoid a sale. They should be proactively seeking bids for the company in order to fulfill their fiduciary duty to all shareholders,” Murphy said.
In its April 8 correspondence, Discovery outlined the rationale for a sale of Anaren and also called into question the quality of stewardship of Anaren’s directors and the governance at the company.
Anaren shares were trading down six cents at $23.36 per share just after 2 p.m. on Tuesday. Before the Vintage Capital offer became public nearly two weeks ago, Anaren’s stock traded just below $20 — closing at $19.61 on April 15.
Anaren employs about 800 people total. The company develops and manufactures components and subsystems for markets including satellite communications, defense, and wireless communications.
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