MAYODAN – Sturm, Ruger & Company’s board is remaining neutral on Beretta Holding’s tender offer to buy up to 2.4 million shares for approximately $107.5 million, a transaction that could raise Beretta’s stake in the North Carolina-headquartered gun maker to 25%. The board disclosed its position in a Schedule 14D-9 filed with the Securities and Exchange Commission on Sept. 28.
The board said it had expressed no opinion on the offer and would not recommend whether shareholders should tender their shares. It also did not determine whether the offer is fair to shareholders or in their best interests, leaving the decision to each investor.
Beretta is offering $44.80 in cash for up to 2,400,184 shares, or about 15% of Ruger’s shares outstanding as of Sept. 17. The transaction is a partial tender offer, not a bid for every outstanding share, and Ruger said it would remain an independent public company if the offer is completed.
An SEC filing from Beretta reports that it currently owns about 9.9% of Ruger. If the offer is fully subscribed and Beretta’s other holdings do not change, its ownership would rise to approximately 25%.
The offer is scheduled to expire one minute after 11:59 p.m. New York City time on Oct. 15 unless it is extended. It is not subject to a financing condition or a minimum tender threshold. Beretta expects to fund the purchase with available cash, according to Ruger’s filing.
Ruger’s board also unanimously approved the offer for purposes of Delaware’s business-combination statute. The offer stems from a May cooperation agreement that ended a proxy contest and gave Beretta the right, subject to ownership thresholds and board approval, to designate up to two independent candidates for Ruger’s board. Ruger said no candidates had been proposed as of the Sept. 28 filing.
The potential business consequence is a substantial increase in Beretta’s ownership and possible board influence at a publicly traded manufacturer whose principal executive offices are in Mayodan. The filing does not disclose any planned change to Ruger’s North Carolina employment, production or facilities, and the offer remains pending.
An independent StockTitan filing summary also reported the board’s neutral position and the offer’s potential to raise Beretta’s ownership to 25%.