Blyth (NYSE: BTH), a consumer products company, today announced it rejected the offer from CVSL to acquire the company for $269 million, or $16.75 per share, following "careful review and consultation with its legal and financial advisors."
Greenwich, Conn.-based Blyth Inc., which sells candles, home accessories and weight-loss products through home parties and other methods, said that direct selling company CVSL made its offer Oct. 25. The $16.75 offer, to be paid in either CVSL shares or cash, was a 31% premium to Blyth's closing price of $12.76 on Oct. 25.
Blyth highlighted five principal reasons for the rejection of the offer, including that it was not backed by any debt or equity financing, and that it potentially required the company's shareholders to take on a debt instrument in the transaction. In addition, the company noted that it would have required the management team and its significant shareholders to take on stock in CVSL, or potentially one of its subsidiaries following the transaction.
In addition Blyth highlighted that CVSL on its own could not raise debt to finance the transaction, and that any debt which was raised would have to be done so solely on the credit capacity of Blyth. Lastly, Blyth noted that the offer would have required using Blyth's cash to pay back its previously issued debt and had no plans in place to ensure its working capital remained at sufficient levels.
Following the announcement of the potential takeover, Blyth's stock rose 21% on Oct. 28. However since then, the stock has fallen dramatically, and is now down almost 25% since that peak, including a 5% drop today.
-- Material from The Associated Press was used in this report.