Amid mounting pressure from a shareholder, Deltic Timber Corp. of El Dorado said Monday that it is continuing a review of “strategic alternatives” but did not set a timetable for completing it.
The publicly traded timber and real estate company said in a news release that it “has been approached by a number of industry participants regarding interest in a potential strategic transaction.” It said it has been evaluating proposals while “finalizing internal strategic initiatives” and other options to “maximize shareholder value.”
“The Deltic Board of Directors is committed to exploring all options, both internal and external, to maximize shareholder value, and is confident that the processes the Company is undertaking will identify the best strategic path to maximize the value of Deltic and achieve the best result for all shareholders,” the company said.
Shares of the company (NYSE: DEL) rose about 3.5 percent in trading Monday morning.
The statement comes after Southeastern Asset Management Inc. of Memphis, which holds a 15 percent stake in Deltic, on Friday criticized Deltic management for not “seriously” working with Southeastern on a third party’s merger proposal.
“We have learned that at least one highly reputable industrial party has made an unsolicited proposal to merge with Deltic in exchange for stock in the acquiring company,” Southeastern said in Schedule 13D filing with the U.S. Securities and Exchange Commission. “While Southeastern has been willing to enter into an agreement with Deltic to help the Issuer evaluate this proposal, it has become clear after many attempts that Deltic is not serious about engaging with Southeastern at a substantive level.”
Southeastern said its confidence in Deltic’s board and management had been “significantly diminished by this refusal to engage” and other reasons, including “its inability to provide any compelling reasons for Deltic to remain a standalone public company.” It listed why it thinks the unsolicited proposal would be good for the company and its shareholders, and added that, “among other things,” it might nominate directors at Deltic’s annual meeting.
Southeastern began publicly beating the drum for a buyout in February, when it issued a Schedule 13D that revealed for the first time that Deltic had been approached by “multiple” suitors.
Earlier this month, Deltic’s new CEO, John D. Enlow, said the company had begun evaluating its assets, competitive position, market risks and opportunities. He said the company was “assessing a comprehensive range of strategic alternatives” and was “honing a strategic plan.”
Deltic did not respond directly to Southeastern’s later Schedule 13D statement on Monday. But it noted that it has met with Southeastern “on a number of occasions to discuss their ideas, consistent with the limitations of the securities laws.” It said it maintains “an open dialogue with all shareholders and values their input.”
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