LL Flooring Holdings Inc., formerly known as Lumber Liquidators, has received a buyout bid from private equity firm F9 Investments LLC. The bid values the wood floors maker at approximately $92.6 million.
F9 Investments, which owns about 8.8% of LL Flooring’s outstanding shares, has offered to pay $3 in cash for each LL share outstanding. This represents a 6.4% premium to Monday’s closing price of $2.82. It is noteworthy that this valuation is significantly lower than the company’s market cap of $3.3 billion reached in November 2013.
Pre-market trading on Tuesday saw LL’s stock drop by 0.7%, nearing its record closing low of $2.74 on October 5th. F9 owner Thomas Sullivan expressed confidence in the offer, stating, “We believe our offer represents a compelling, immediate, and certain cash value for LL’s shareholders, given the Company’s deteriorating financial condition and declining stock price. These factors reflect the market’s lack of confidence in the current Board’s strategy.”
Sullivan further criticized LL Flooring’s recent dismal third-quarter earnings performance, stating that it demonstrates a lack of urgency, credible plan, execution ability, and cost control on the part of the Board and management.
Year to date, LL’s stock has experienced a significant decline of 49.8%, while the S&P 500 has seen a 14.9% increase.