Duratek Inc.'s largest shareholder said yesterday that he "strenuously" opposes the Columbia-based company's deal to be acquired for nearly $400 million by another company involved in the disposal of radioactive and hazardous waste.
Jeffrey L. Gendell, general partner of Tontine Capital Partners LP, said in a letter to Duratek Chief Executive Officer Robert E. Prince that he is concerned by the "apparent lack" of alternative proposals. He called a $8.6 million breakup fee to be paid by Duratek if it terminates the deal "extraordinarily upsetting."
Gendell did not return a telephone call yesterday. Tontine Capital owns 1.9 million shares of Duratek's 14.86 million outstanding, or 13 percent, according to financial filings.
The company reported lower earnings for the year yesterday, mostly because of a lack of new commercial contracts.
EnergySolutions, based in Salt Lake City, agreed to pay $396 million, or $22 a share in cash, which includes the assumption of Duratek's outstanding debt. The share price is nearly 26 percent higher than Duratek's closing stock price Monday.
Gendell said the $22 a share offer "does not adequately reflect the fair value of the company in the context of a change of control."
He noted that Duratek's stock has traded above $28 in the past 12 months, and that the "outlook for the markets that Duratek serves has never been more robust."
"Based upon the above, you should clearly understand that Tontine Capital does not support the announced transaction with EnergySolutions and will strenuously oppose efforts to consummate the transaction on its current terms," said the letter, which was disclosed in a Securities and Exchange Commission filing yesterday.
The letter "strongly encourages the board to be open minded to any and all bona fide expressions of interest which may present themselves as a result of the company's announcement of the sale transaction."
Duratek's stock closed yesterday on the Nasdaq stock market at $22.27, up 98 cents.
Diane Brown, a Duratek spokeswoman, said yesterday that the company has no specific comment about Tontine Capital's letter.
Brown repeated the company's position that the acquisition would benefit stockholders and improve Duratek's role as a nuclear and waste disposal company.
"This offer represents a premium over market and recognizes the accomplishments of Duratek and the capabilities it has developed," she said.
In announcing the deal Tuesday, EnergySolutions said Duratek would help it continue to grow. EnergySolutions is a private company that was formed this month from three entities involved in different aspects of the nuclear energy, waste handling and disposal, and technical services business.
Yesterday, Duratek said its net income for the year that ended Dec. 31 fell to $18.4 million from $21 million.
Revenue decreased to $281.2 million from $286.2 million a year earlier, which the company attributed to a lack of new commercial projects and the loss of two federal contracts.