Thursday, RCM Technologies Inc (RCMT) said it rejected a hostile bid by CDI Corp. (CDI) to acquire the company. CDI made a bid for all the outstanding shares of RCM common stock for $5.20 per share in cash. RCM stock rose by more than 40% on the news in the after hours trade.
Pennsauken, New Jersey-based RCM said its board of directors has determined that it would not be in the best interests of the company to pursue the transaction as presently structured by CDI.
CDI in the meantime said it would take the offer directly to RCM shareholders having received no response until date from RCM's board after it proposed to takeover the company for nearly $68 million on May 21.
CDI said, "We believe that it is critical to allow the RCM shareholders to evaluate our proposal which would provide significant, certain and immediate value to the shareholders."
CDI President & CEO Roger Ballou stated earlier today, "While we still prefer to work together with RCM and its board of directors to negotiate a mutually beneficial agreement for our respective stakeholders, we feel the significance of this proposal requires us to take our proposal directly to RCM's shareholders."
According to Philadelphia-based CDI, the $5.20 per share proposal implies a premium of approximately 37% to RCM's closing share price of $3.79 on May 21, a premium of approximately 33% to RCM's average closing share price this past week; and a premium of approximately 90% to RCM's twelve month weighted average closing share price. CDI had also said that its offer is not subject to any financing condition as it has a significant cash position and can readily access available credit.
RCMT closed Thursday's trade at $3.50, up $0.01 or 0.15%, on a volume of 23 thousand shares on the Nasdaq. In after hours, the stock rose by $1.42 or 40.57%.
CDI closed Thursday at $16.32, up $0.69 or 4.41%, on a volume of 112 thousand shares on the NYSE.
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