Ancora offers up to $1.2 billion for H.B. Fuller’s Building Adhesive Solutions unit

Activist investor Ancora Holdings has proposed that H.B. Fuller explore the sale of its Building Adhesive Solutions business for up to $1.2 billion in cash. In a letter to H.B. Fuller’s board, Ancora described the potential transaction as a win-win for the company and its shareholders, arguing that a sale could create value for both sides. Ancora is also considering a proxy fight to gain control of H.B. Fuller’s board, according to a source familiar with the matter.

The investment firm said it had privately re-engaged with ​H.B. Fuller's chief executive and chairman for a potential deal in early July. "We ​fear your collective preference for entrenchment is once again impairing your judgment and undermining shareholders' best interests," Ancora said in its letter to Fuller's board, adding that it was ​prepared to immediately enter into a confidentiality agreement and begin due diligence.

H.B. ​Fuller, whose shares closed nearly 3% down on Wednesday, said it would "carefully evaluate the proposal in ⁠consultation with its financial and legal advisors".

Activist investors are increasingly urging companies to sell entire businesses or non-core assets as dealmaking activity accelerates, putting greater pressure on boards and management teams. Ancora has similarly called on chemical maker Ashland to pursue a sale. Earlier this year, H.B. Fuller agreed to acquire UK-based medical supplier Advanced Medical Solutions Group (AMS) in a cash transaction valued at approximately £715 million ($967 million), including debt. Ancora, which disclosed a more than 2% stake in H.B. Fuller in May, criticised the proposed AMS acquisition as an “irresponsible pursuit” and called on the company to abandon the deal.

"On Wednesday, Ancora said the sale of Fuller's ⁠building adhesive ​unit would allow the company to focus ​on integrating Advanced Medical Solutions while exiting a low-margin segment in a highly fragmented market."

Source: Reuters