A move to acquire USANA Health Sciences Inc.'s outstanding shares is dead.
A pair of groups controlled by USANA chairman and chief executive officer Myron Wentz said Wednesday that they are terminating their offer to buy the company's outstanding shares because it appeared they would not get at least 90 percent of the company's shares a condition in their tender offer. A filing with the Securities and Exchange Commission indicates that they were able to secure about 81 percent at the time of the offer withdrawal.
The pull-out came a day after the firms extended their offer deadline by a week, until Monday night.
A group of investors, led by Wentz, offered to buy the outstanding shares originally for $26
per share. Gull Holdings Ltd. and Unity Acquisition Corp. said in May that they would make the tender offer to acquire outstanding USANA shares at that price in a move to take the company private. Wentz controls Gull, and Gull and its affiliates control about 68 percent of USANA common stock.
They later boosted the offer to $28 per share. But each offer was deemed by a special committee of the USANA board of directors to be "inadequate," and the offer spawned a pair of shareholder lawsuits.
"After further reviewing the results of the offer and receiving additional feedback from shareholders, it became clear that the purchaser would not receive tenders of a sufficient number of shares to satisfy the non-waivable condition to the offer that the purchaser own at least 90 percent of the outstanding shares following the completion of the offer," Gull and Unity said Wednesday in a news release.
John Dillard, a spokesman for Gull and Unity, declined to comment when asked Wednesday if the companies would make another offer for the shares in the future. He also declined to comment on several other questions.
Salt Lake City-based USANA develops and manufactures nutritional, personal-care and weight-management products. It has about 1,000 employees worldwide, including 700 in Utah.
In a hearing on one of the shareholder lawsuits on Monday, Third District Judge John Paul Kennedy issued a preliminary injunction to stop the sale of the shares. Kennedy also required Gull, Unity and the special committee to disclose more information related to the offer disclosures that Dillard described as "routine."
Gull and Unity said Wednesday that the prospective share buyers "have decided to not undertake the actions that would be necessary to lift the preliminary injunction" and that they would terminate the offer.
"Our offer to shareholders to purchase the publicly held shares of USANA was intended to provide shareholders with an opportunity for immediate liquidity at a significant premium to the trading price for the shares," Wentz said in a news release Wednesday.
"While we are disappointed that we were not able to complete the offer, we believe that USANA shareholders have sent us a strong message about their confidence in the long-term prospects of the company. Our mission has always been to develop and provide the highest-quality, science-based health products, distributed internationally through network marketing. We will continue to pursue this mission for the benefit of all shareholders."
USANA shares fell $3.52, or more than 12 percent, Wednesday to close at $24.43. During the past year, the price has ranged from $18.18 to $50.Both of the shareholder lawsuits sought class-action status and a stop to the sale of the shares. The plaintiffs claimed the defendants violated their fiduciary duties by failing to maximize shareholder value and by withholding certain information. Both complaints also said the offer was unfair because it was below the stock's value.
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