Shares of Edgewell Personal Care Co (NYSE:EPC) spiked in after-hours trading Monday after reports surfaced that the company had turned down an unsolicited acquisition proposal from private equity firm Yellow Wood Partners.
According to people familiar with the matter, the approach carried a per-share price of $30, which Edgewell's board considered too low. The company’s stock had closed at $22.72 per share and traded near $25 in the after-hours session following the disclosure, representing a roughly 10% intraday after-hours move.
Year-to-date gains for Edgewell stand at about 33%, lifting its market capitalization to near $1.05 billion. When debt is included, the personal care products maker's enterprise value is approximately $2 billion.
Edgewell, based in Shelton, Connecticut, was created in 2015 as a spin-off from Energizer Holdings Inc (NYSE:ENR). Its brand portfolio includes Schick and Wilkinson Sword razors, Hawaiian Tropic sunscreen, and Wet Ones wipes.
Yellow Wood Partners, a Boston-based private equity firm, counts consumer brands such as Chapstick lip balm, Dr. Scholl's footcare products, and Noxzema skin care among its holdings.
The decision to reject the $30-a-share proposal signals that Edgewell's board believes the proposed price did not reflect the value they assign to the company. Given the stock's year-to-date appreciation, the offer appeared to be below current trading levels when the approach became public.
Market participants will watch for any follow-up activity from the bidder or other potential suitors, though no additional details about subsequent negotiations or approaches were reported.
Summary
- Edgewell declined a $30-per-share unsolicited takeover bid from Yellow Wood Partners.
- Shares rose in after-hours trading from a $22.72 close to around $25.
- The company’s market capitalization is about $1.05 billion and enterprise value about $2 billion.
Key points
- Corporate action - a rejected private equity offer triggered a notable after-hours stock move.
- Consumer goods sector - Edgewell is a consumer personal care products company with well-known brands.
- Financial markets - the stock's year-to-date performance has already lifted market valuation materially.
Risks and uncertainties
- Potential for renewed offers - the article does not report whether follow-up bids will occur, leaving the outcome uncertain for shareholders.
- Valuation sensitivity - the board's view that the offer was too low highlights disagreement on company valuation, which could affect future negotiations and market perception.