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The Shareholder Forumtm

support for fair value realization

of stock investments in

DBM Global Incorporated

(f/k/a Schuff International Inc.)

 
 

Support of Minority Shareholder Interests

The Shareholder Forum had offered to support Appraised Value Rights ("AVR") of DBM (f/k/a Schuff International) minority shareholders in 2014 following a $31.50 per share tender offer by the company's controlling shareholder, HC2 Holdings, Inc., with the stated intent to proceed with a short-form merger "as soon as practicable.”

HC2 acquired DBM shares in the 2014 tender offer and other purchases bringing its total holdings to 92% of outstanding DBM shares, but has not proceeded with a merger. The Forum has continued to support the minority shareholder interests of its AVR participants in this context.

 
     

 

Forum distribution:

Allegations of unfair process in pricing the buyout

 

For the court filing of the class action lawsuit referenced in the article below, see

 

Source: New York Post, November 10, 2014 article

Lawsuit claims Falcone swept in to steal steel deal

By James Covert

November 10, 2014 | 11:52 pm

Phil Falcone

Photo: Reuters

Phil Falcone’s controversial move to take a steel-fabrication firm private has landed him in court.

A shareholder suit that seeks class-action status charges that the board of Schuff International — whose projects include the new Apple headquarters — allowed Falcone’s firm HC2 to buy the company on the cheap.

The suit, filed Nov. 6 in Delaware Chancery Court, alleges that a special committee designated by Schuff’s board to examine HC2’s takeover offer was a sham.

‘The special committee did nothing,” the suit alleged. “The special committee did not conduct a process. The special committee did not attempt to negotiate a higher price. The special committee did not consider alternatives.”

Falcone — who in an unusual arrangement had become chairman of Schuff after amassing a 70 percent stake, even as the firm’s board weighed a takeover bid by his firm HC2 — declined to comment Monday.

HC2’s tender for Schuff’s remaining shares at $31.50 a share was “well below the company’s intrinsic value,” according to the suit. Noting that Schuff recently landed a big construction project, the suit cited analyst reports valuing Schuff shares conservatively at $39.

Furthermore, according to the suit, HC2 on Oct. 29, bought a 65,000-share slug of Schuff on the open market at $34 — a healthy premium to its tender offer — in order to surpass a 90 percent ownership stake, which under Delaware law gives it the right to buy the company’s remaining shares.“Plaintiff observed this volume and pricing information,” but it was subsequently scrubbed from services including Nasdaq, Yahoo and OTC Markets, according to the suit.

The suit even took a direct swipe at Falcone, charging he has “a well-documented history with the SEC’s enforcement division.”

It cited a 2013 settlement in which Falcone “admitted to using investor money to pay his own taxes, secretly favoring some customers over others, and engaging in an illegal market manipulation.”
 

© 2014 NYP Holdings, Inc.

 

 

The project supporting investor interests in DBM Global Incorporated (f/k/a Schuff International, Inc.) is being conducted by the Shareholder Forum for the benefit of Participants that have reserved Appraised Value Rights ("AVR") Management, subject to conditions including standard Forum policies that each Participant is expected to make independent use of information obtained through the Forum and that participation is considered private unless the Participant specifically authorizes identification.

Inquiries may be sent to shfk@shareholderforum.com.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.