COLUMBUS - A group that wanted to head off Stillwater Mining Co.'s pending sale to a Russian metals giant has withdrawn its rival bid, Stillwater officials said Tuesday.
The company said in a statement that the private equity affiliate of an investment banking firm apparently was no longer interested in pursuing the $100 million "rights offering" it had suggested last month.
Stillwater rejected the group's offer at first, saying it would violate "no-solicitation" provisions of its pending sales agreement with MMC Norilsk Nickel, and also would not generate enough cash to sustain Stillwater in the long term.
Frank McAllister, Stillwater's chairman and chief executive officer, was out of the office Tuesday, but said in a written statement that the rival bidders recently made changes in their proposal and Stillwater officials had agreed to meet to discuss it.
"We are disappointed by the firm's response, as we hoped to discuss the possibility of putting into place a financing alternative in the event the Norilsk Nickel transaction is not completed," McAllister said.
But he added that Stillwater's board of directors "continues to unanimously" support the sales agreement with Norilsk Nickel and "urges all stockholders to vote in favor of the transaction" at a special stockholders meeting planned for June 16 in Denver.
"The board believes the Norilsk Nickel transaction is in the best interests of the company and its stockholders," McAllister said.
Stillwater, based in Columbus, is this nation's only producer of platinum and palladium.
Last November, Norilsk Nickel offered to buy a controlling interest in Stillwater. If the sale goes through, the Russian minerals giant would control nearly two-thirds of the world's palladium supply.
That is one reason behind the rival bid that developed, in part, with the help of Stillwater's former chief operating officer, John Andrews.
Andrews said earlier that the deal, backed by an unnamed investment banking firm, would have raised $100 million for Stillwater in a rights offering, where existing investors get a chance to buy more shares at a discount to raise operating cash. If they don't want to buy more shares, the investment bank has agreed to buy them.
Norilsk Nickel offered Stillwater $341 million - $100 million in cash and $241 million worth of Russian palladium. Since then, however, the price of palladium has fallen so dramatically that Stillwater would get only $150 million worth of palladium at today's prices.