Orbis Continues to Urge Clayton Homes Shareholders to Vote Page 1/5 Against Proposed Berkshire Hathaway Acquisition
HAMILTON, Bermuda, July 29 /PRNewswire/ -- Orbis Investment Management Limited today reaffirmed that it is urging all Clayton Homes (NYSE: CMH) shareholders to continue to vote AGAINST the proposed merger with Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) at the reconvened special meeting to be held tomorrow, July 30th. We are not surprised that four independent parties were unable to agree on a joint bid for a company like Clayton Homes after only one week of due diligence work. We believe the fact that potential bidders of the quality of Cerberus Capital, Texas Pacific Group, The Blackstone Group and Credit Suisse First Boston responded to a very brief window of opportunity speaks volumes as to the quality of Clayton Homes. Clayton Homes is a great company that is worth well more than the $12.50 per share being offered in the Berkshire Hathaway merger proposal. On July 16th, with no other bids on the table, more than two-thirds of Clayton Homes' independent shareholders voting had tendered their votes against the proposed merger. We continue to believe Clayton Homes can thrive as an independent company. We remind shareholders that if they vote down the Berkshire Hathaway proposal tomorrow the Berkshire Hathaway financing commitment will continue in place and the lock-up of the Clayton family shares will fall away. Our objections to the proposed Berkshire Hathaway merger are the same today as when the merger was first announced and have only been reinforced by recent events.
-- We object to the flawed process originally adopted by the board in approving the merger, the unfair terms of the merger agreement, and the price offered. -- The Clayton Homes Board made no attempt to auction the company. The process adopted by the company following its adjournment of the July 16th process adopted, including the recent very brief two-week window, was woefully inadequate. -- Based on market movements alone the $12.50 price is well below what the Clayton Homes shares would be trading at absent the Berkshire Hathaway bid. The clearest proof of this is the substantial increases in the share prices of Clayton Homes' comparables. -- In addition, had the Berkshire Hathaway bid been a share exchange offer based on its share price on April 1, 2003, the current equivalent cash value of the offer would be $13.70/ share. We believe the independent Clayton Homes shareholders deserve to participate in the market increase since the proposed merger was announced and to realize the value in the growth of Clayton Homes as it turns the corner in a cyclical industry. In deciding whether to vote to sell their shares to Berkshire Hathaway for $12.50, we ask all Clayton Homes shareholders to heed the words of Warren Buffett, who said:
"We don't care about the bumps; what matters are the overall results. But the decisions of other people are sometimes affected by the near-term outlook, which can both spur sellers and temper the enthusiasm of purchasers who might otherwise compete with us."(1)
We urge all independent shareholders to continue to vote AGAINST the proposed merger with Berkshire Hathaway and we urge all independent shareholders who have already voted for the merger to change or revoke their vote.