January 8, 2001
MAINE STOCK TRENDS
Maine stocks outpace the averages in 2000
Copyright © 2001 Blethen Maine Newspapers Inc.
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Senior management, BTIC directors, as well as analysts have all gone on record saying that the $8.50 per share being offered is inadequate, given the Company's patented technology, strong growth in earnings and revenues over the past several years, and the potential for significantly enhanced revenue from recently-penetrated new markets.
Brunswick Tech manufactures fabric. The fabric is woven out of glass in a patented process that results in a stronger, lighter weight resin cloth, which is then used in the manufacture of fiberglass. The material is a component in 60% of the high-end consumer powerboat market. Other uses range from snowboards to wind mill blades.
BTIC fabric is presently being used for highway bridge construction in Ohio. It is also a key component in the sleaving of a new tunnel being built in Europe. In the latter case, BTIC fabric installs in less than 1/3 the time as the conventional material (steel and concrete) and is expected to last significantly longer.
More than 80% of BTIC's shareholders have already tendered their stock irrevocably. If you haven't yet, you might want to consider Maine's "Dissenters, Rights" law. Since BTIC is a Maine company, it falls under Maine corporate law. That law permits shareholders (who refuse to tender) to contest the value being offered in a takeover such as this.
First, you should note that the "official" tender by Saint Gobain's CertainTeed division, concluded at midnight, June 29, 2000. Saint Gobain, which is a huge French conglomerate, announced that it had received 80% of BTIC's stock as of June 29th. It then opted to extend the tender through July 14th, hoping to obtain 90% of the shares. If it can obtain 90% of the shares, it can acquire BTIC without further approval from the remaining shareholders. Without the 90%, CertainTeed must call a special shareholders ' meeting in the fall to officially acquire the remaining shares of BTIC. That will happen, since CertainTeed now controls in excess of the 50+% needed to complete the acquisition.
Should you tender your shares, if you haven't already? Could the stock be a buy at its current price?
The answer will likely be decided by the courts here in Maine. It is possible that the dissenting shareholders may receive less than the $8.50 being offered today. On the other hand, if insiders at BTIC and analysts were convinced that BTIC was worth significantly more than $8.50 per share, it is likely that the courts can be convinced of this also. Former founder and CEO, Martin Grimnes, who resigned from the Company this past week after CertainTeed took control, stated at an analysts' meeting in December 1999 that he felt the company was worth in excess of $20 per share.
The point of all of this is that if you haven't yet tendered your BTIC shares, you might want to seek some professional advice before tendering. And, if you don't own any, you can still buy some. There's a good chance that you could end up with a great deal more than $8.50 per share for your stock. After all, if a $25 billion dollar company was motivated enough to make its first-ever US hostile takeover, and chose a company with less than $50 million in revenues in which to do it, that ought to tell you something about how undervalued the $8.50 per share really is. BTIC went public in February 1997 at $9.50 per share and spent the majority of the time since then trading above the $8.50 that CertainTeed is offering. Though the tender is scheduled to expire on July 14th, that doesn't mean that this will be your last chance to obtain $8.50 for your stock. Shareholders can still tender their shares for the $8.50 per share after the tender offer expires.
What were some of the other movers in local stocks for the first half of 2000? Next in line behind BTIC, was Mid-Coast Bancorp (MCBN-15 7/16), the Waldoboro-based bank holding company that owns Waldoboro Bank. MCBN is in the process of being acquired by Union Bankshares of Ellsworth, Maine for 15 7/8 per share.
Portland-based ImmuCell (ICCC-3 1/2), which got pulled upwards on the coattails of the first quarter surge in biotech stocks, was a distant third in the six-months' performance race. It was up just over 55%. That is on top of year-earlier performance that saw ICCC advance 105% during calendar 1999.
Maine's worst-performing stock was Lewiston-based Acadia Group (ANHS-2), which fell 58.33% during the first half of 2000. The stock provides medical practice management to physicians. ANHS got caught up in the Internet craze late last year. The stock went into a tailspin when investors came to realize that 3-year cumulative revenues of less than $4.0 million, no earnings, negative cash flow, negative book value, and a lot of hype weren't worth the $100 million valuation placed on the Company at one point earlier this year.
UnumProvident (UNM-21 7/16), which disappointed Wall Street in February when it released its 4th Quarter results, was the second worst-performing stock. For the first six months of 2000, UNM lost 37.4% of its value.
All in all, Maine stocks delivered an average return of 14.3% for the six months ended 6/30/2000. This return, by far, outpaced every major stock market average over the comparable time period.
For the abbreviated July 4th trading week, Presque Isle-based Maine Public Service (MAP-22 ²) was Maine's top performing stock. The stock has moved up on the news that Bangor Hydro Electric Company (BGR-23 3/4) agreed on June 30 to be acquired fro $26.50 cash by NS Power, out of Nova Scotia. That acquisition is expected to be completed within 9-12 months. MAP's price moved up from 19 1/8 just prior to the BGR merger announcement and closed Friday at 22 ²--up 11.6% for the week.
Acadia Group continued its year to date slide, and fell an additional 20% for the July 4th week.
And finally, here's an important note for Hannaford Bros. Co (HRD-74 5/16) shareholders. The pending merger with Delhaize America is eminent. HRD shareholders should make the election to receive all cash in the transaction. This election MUST be made by the shareholder within the next few days. Otherwise, the default election will result in a lower value for shareholders. Shareholders who fail to make an election will likely end up with a high proportion of stock in DZA, which will lower the value significantly. The transaction is taxable to shareholders irrespective of whether they elect all stock, all cash, or some combination of both. HRD has called for election forms to be returned to First Union National Bank, the Exchange Agent for the transaction, by 5:00 PM on July 14, 2000, the last business day before the tentative effective date of the transaction, in compliance with instructions previously sent to all shareholders. Here is a link to the July 7th announcement:
Shareholders who have already returned their election form are urged to call the Exchange Agent at 888-257-9919 to verify that their election form is on file.
Hannaford's stock price advanced 1 7/8 on Friday to close at 74 5/16 after the press release hit the wires.
Brad McCurtain is president of Maine Securities Corporation. Maine Securities Corporation is an investment firm specializing in Maine's securities. From time to time, the corporation, its employees, and its clients may buy, hold, and/or sell positions in companies mentioned herein. As a regulated securities broker/dealer, the company and its employees are required to abide by all securities regulations at all times when communicating with the public. Brad McCurtain may be reached at info@MaineSec.com. Web site: http://www.MaineSec.com