In a letter to ACS’ board of directors Cerebrus said, “We are very impressed with the management, business and opportunities of Affiliated Computer Services, Inc. (the “Company”) and continue to believe that the Company represents an attractive investment opportunity. We regret that we must withdraw our offer to acquire the Company due to the continuation of poor conditions in the debt financing markets.” A copy of the letter was included in an SEC filing , published today.
Earlier this year, Darwin Deason and Cerberus Capital Management offered to buy ACS for about $6 billion ($62/share, versus trading at about $50/share today – see HRO Provider Buyout Offer Proposed ). Deason, founder of ACS, controls about 42% of ACS shares, according to the Wall Street Journal (he owns about 5%, but maintains about a 40% control over the company via a special supervoting class of stock). ACS eventually assembled a committee of independent directors, who were charged with negotiating with the buyers, while seeking potentially higher bids for the Dallas-based ACS, which also owns Buck Consultants.
Cerebrus maintained that it felt its offer was solid, and that “…had our proposal been put to a shareholder vote, it would have received approval by an overwhelming majority of the Company’s unaffiliated shareholders.” In fact, the letter went on to assert that “Had the Special Committee engaged with Cerberus and Mr. Darwin Deason on the schedule we proposed in our offer letter, we are confident that our acquisition of the Company would have been approved and closed, and unaffliated shareholders would have been paid a substantial premium for their shares, some months ago.”
It may not be the last time Cerebrus makes a bid for ACS – the letter also says that if market conditions change, they might consider “proposing another transaction.”