Meadow Valley shareholder Carpe Diem opposed to renegotiation with Insight, could seek board seats

By Lisa Kerner

Charlotte, N.C., Dec. 5 - Carpe Diem Capital Management LLC, one of Meadow Valley Corp.'s largest beneficial stockholders, said it would not accept less than $11.25 per share in a renegotiated offer between Meadow Valley and Insight Equity I LP's affiliates Phoenix Parent Corp. and Phoenix Merger Sub, Inc.

The stockholder, with a 7.3% ownership interest, made its comments in a Dec. 4 letter to Meadow Valley's board of directors included in a schedule 13D/A filed with the Securities and Exchange Commission.

In addition, Carpe Diem said that if the proposed transaction between the two companies does not close by Jan. 7 or if the board accepts a lower price, Carpe Diem will take action to "secure significant board representation."

Carpe Diem is ready to nominate its president John Ziegelman and Consolidated Management Group, Inc. chief executive officer Olof Nelson for election.

Ziegelman would also expect to be named chairman, the filing said.

Carpe Diem said it expects Meadow Valley to vigorously pursue the rights of its shareholders and attack Insight for potential breach of contract. Insight maintains Meadow Valley has suffered a material adverse effect.

As previously reported, Meadow Valley disagrees with Phoenix Parent's claim that the company has suffered a material adverse effect and said it will defend itself if Phoenix Parent terminates the merger based on that claim.

The alleged material adverse effect occurred as the result of a decrease in the fair market value of Meadow Valley in excess of $6.0 million since the date of the merger agreement, Phoenix Parent said.

Meadow Valley shareholder Hoak Public Equities, LP said in a prior SEC filing that it also will not support any renegotiation of the company's merger agreement that results in net proceeds of less than $11.25 per share.

In a Dec. 3 letter to Meadow Valley special committee chairman Don A. Patterson, the 5% shareholder said while it was reluctant to support the original merger agreement, it is prepared to take legal action if the deal is not closed under the already agreed upon terms and timeframe.

Meadow Valley announced it will hold a special meeting of stockholders on Dec. 26 at 1 p.m. ET for the purpose of approving the company's proposed acquisition by Insight Equity I LP's affiliates.

In July Meadow Valley, a Phoenix construction materials company, agreed to be taken private by Insight, a Dallas-based investment company, for $11.25 per share in cash or a total of $61.3 million.

The merger agreement includes termination rights for both companies, with fees of $1.5 million and approximately $2.5 million payable under certain circumstances.

Meadow Valley and Insight agreed to extend the termination date of the merger agreement to Jan. 7 from Dec. 31.

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