Oglebay Norton says strategic alternatives could generate more value than Harbinger offer

By Lisa Kerner

Charlotte, N.C., Aug. 23 - Oglebay Norton Co.'s board of directors recommends that its shareholders refrain from taking any action regarding the unsolicited $31-per-share cash tender offer from Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund, LP announced on Aug. 7. The tender is set to end on Sept. 6.

A special committee of the board said it does not believe it can "properly evaluate Harbinger's offer." According to a company news release, the board considered the following when making its recommendation to shareholders:

• A strategic alternative could generate greater value than Harbinger's offer;

• The special committee believes it is "well suited" to consider a sale of Oglebay Norton;

• Harbinger's offer provides limited ability to share in the company's future prospects;

• The Harbinger offer does not contain a definitive financing plan; and

• Harbinger's offer is highly conditional.

"Our board is undertaking a full and thorough exploration of the company's strategic alternatives, including a possible sale or merger," president and chief executive officer Michael Lundin said in the release.

"Numerous potential buyers have been contacted as part of this process, which we believe could generate value greater than the $31.00 per share offered by Harbinger. Furthermore, our board and management team are committed to continuing to execute on our strategic plan to further enhance shareholder value."

Lundin pointed out that Oglebay's new management team has successfully restructured the company, sold non-core assets, reduced debt and costs, and increased the company's net income.

"This, together with Oglebay Norton's high-quality reserves, positions us well to capitalize on the demand in our markets," Lundin added.

JPMorgan is advising Oglebay Norton along with Imperial Capital, LLC, Jones Day and Georgeson Inc.

On Aug. 7, Harbinger reported ownership of 2,621,201 Oglebay Norton shares, or about 18.1% of the company. Harbinger's tender offer is conditioned on the investment firm receiving at least an additional 32.9% of the outstanding shares for a total of roughly 51% of the outstanding shares.

Oglebay Norton is a Cleveland-based provider of minerals and aggregates to markets including building materials, environmental remediation, energy and industrial applications.

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