Luther King Capital ups bid for Industrial Distribution to $12.10; Platinum Equity can remain in play

By Lisa Kerner

Charlotte, N.C., April 23 - Luther King Capital Management Corp. increased its offer for Industrial Distribution Group, Inc. to $12.10 per share from $11.70, topping Platinum Equity Advisors, LLC's latest offer of $11.80 per share.

The definitive offer included an equity financing commitment letter from a Luther King Capital investment fund, an Industrial Distribution news release said.

Platinum Equity's latest offer was set to expire at 5 p.m. ET on Wednesday, it was announced on Tuesday. The investor group had originally offered $10.30 per share.

Industrial Distribution's board of directors determined that the $12.10-per-share offer from Luther King Capital is a "superior proposal" and said it would not accept the Platinum Equity offer.

Platinum Equity has until 5 p.m. ET on Friday to match or exceed the Luther King Capital offer.

Luther King Capital's offer expires at 12 p.m. ET on Saturday.

Industrial Distribution said that under its existing merger agreement with Platinum Equity, the company would be required to pay a 3% break-up fee to Platinum Equity if the board accepts and recommends the Luther King Capital merger agreement.

Luther King Capital agreed, under certain conditions, to reimburse Industrial Distribution for the break-up fee payment, according to the release.

Wesco Distribution, Inc., which had offered $11.75 per share to acquire Industrial Distribution, will not submit any further bids, a Wesco news release said.

"We are pleased that Luther King Capital Management, our largest stockholder at approximately 15%, has expressed this tangible belief in the value of Industrial Distribution and is willing to deliver that value to all of our stockholders," Industrial Distribution chairman Richard M. Seigel stated in the company's news release.

"Consistent with our obligations to Platinum Equity, however, we will cooperate with Platinum Equity as it develops its response," Seigel added.

Industrial Distribution said it will reschedule the May 1 special meeting of stockholders to satisfy the required period for notice to its stockholders about developments since the previously distributed March 31 proxy statement.

Atlanta-based Industrial Distribution supplies maintenance, repair, operating and production products and services to manufacturers and industrial users in the United States and China.

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