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CIC and Newcastle Make Play for Gehl –

Things are Out of Wack in Wisconsin.

Gehl Co., a maker of light construction and agricultural equipment based in West Bend, Wis., is the subject of a proposed hostile takeover led by shareholders CIC Equity Partners and Newcastle Partners, which collectively own 6.4% of Gehl’s common stock.

The investor group offered Gehl, $18 per share to buy out the company, a 70% premium over its share price.

William Gehl, who owns approximately 50,000 shares of Gehl, and the company’s board rejected the offer on Dec. 22, the same day it was received, citing the standing opinion of the board that the company’s current strategy, pursued as an independent entity, was the preferred means of generating value for its shareholders.

“Mr. Gehl is a big fish in a small pond,” said Paul DeRobbio, managing director at CIC Equity. “He says he doesn’t want to be private, even though he runs the company like a private one anyway – communication with shareholders is often an issue.”

DeRobbio said his firm does not think Gehl, the company, has the wherewithal to compete in its market as is. In his opinion, William Gehl is simply taking the “Nancy Reagan defense, ‘just say no’ to any and all suggestions of selling the company”.

Shares of Gehl steadily fell throughout the last half of 2000. Sources say the company lacks a key competitive weapon – a sturdy balance sheet – in a world where consolidation is inevitable and owners need cash to make acquisitions.

If CIC Equity ever becomes owner of the company, it plans to make strategic relationships with large retail houses and use leverage to make acquisitions, DeRobbio said.

“We have the ability to beef up its product line and help the company through these slow times,” he added.

Adding fuel to the fire, at press time, a private shareholder filed a lawsuit against Gehl Co. stating that Gehl’s board continues to “completely ignore CIC’s and Newcastle’s requests for discussion and/or negotiation despite the fact that these parties have publicly stated that they want to sit down with Gehl and negotiate a mutually acceptable transaction.”

Calls to William Gehl went unanswered.