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Chapman buys 7.4% in Building Materials Holding, tries to interest competitors in buying company
New York, May 25 - Chapman Capital LLC said it bought a 7.4% stake in Building Materials Holding Corp. and added that it has been promoting the idea of purchasing the company to other businesses in the sector.
Chapman, through Chap-Cap Partners II Master Fund, Ltd., Chap-Cap Activist Partners Master Fund, Ltd., Cayman Islands, Chapman Capital LLC and Robert L. Chapman, Jr., now has 2,189,239 shares in Building Materials, bought at a cost of $36.26 million, according to a schedule 13D filing with the Securities and Exchange Commission. That, Chapman claims, makes it the biggest owner of the company's stock.
In a letter to chairman and chief executive officer Robert Mellor and other board members, Chapman recommended that Building Materials "engage financial advisors to explore the complete or divisional sale of the company."
The building materials sector is in the middle of a consolidation wave, Chapman argued.
After attending a presentation by the company and then speaking to chief executives at its "sector peers," Chapman wrote: "I can convey an extremely high level of interest from both private equity and strategic building supply players in the acquisition of the company.
"Chapman Capital recognizes the unique value of BMHC's assets, the years and efforts required to assemble and integrate them. As a result, we are not encouraging an inopportune, undervalued sale, but instead a methodical auction timed to consummate into the inevitable cyclical recovery."
Building Material Holding Corp. is a San Francisco-based provider of building products and construction services.
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