Gehl Co. Leaves The Auction Block

Citing troubles in the economy and the inability to draw an acceptable price, Gehl Co. gave up fielding offers. The West Bend, Wisc.-based agricultural and construction machinery manufacturer announced a restructuring plan and a 500,000-share buyback in choosing to remain independent. William D. Gehl, chairman, president, and CEO, coupled the announcements with a swipe at the investment firms that put the company in play and pressured it to launch a lengthy strategic review with the help of Robert W. Baird & Co. Gehl said directors considered all offers, including the bid from CIC Equity Partners Ltd. and Newcastle Partners LP, and found them either inadequate or “highly conditional or both.” He noted that the CIC/Newcastle bid previously had been rejected and that “the group did not have committed financing in place to complete a possible transaction.” “The actions of the CIC/Newcastle group during the process confirmed our belief that the group was never a serious buyer but was only interested in provoking a change-of-control transaction as a means of advancing its own short-term interests,” he said. The company said it would close its Lebanon, Pa., plant and transfer production to other facilities and trim the workforce by 100 jobs, or 10%. Gehl said it expected pretax savings of $1 million to $1.2 million in 2002 and $4 million to $4.5 million the following year. But it will incur restructuring costs of $5.5 million to $6.5 million, including $4.2 million to $4.7 million during the rest of 2001.