CHICAGO A.M. Castle & Co.s board of
directors has successfully fended off a possible takeover by
rival Ryerson Inc. and Platinum Equity LLC, Ryersons
Platinum Equity LLC filed a
Schedule 13D form with the Securities and Exchange Commission
on Aug. 20 disclosing that the Los Angeles-based investment
firm, a number of its funds and Chicago-based Ryerson jointly
owned nearly 1.4 million shares of Castles common stock
more than 6 percent of its outstanding
sharesvalued at $17.4 million.
They acquired the shares with the intent of entering
discussions with Oak Brook, Ill.-based Castle "concerning (its)
business and operations, a possible acquisition and/or
strategic alternatives," according to the filing.
During Castles quarterly conference call Thursday,
chairman Brian P. Anderson said the board met with
Ryersons representatives to "discuss their interest in
But after Anderson and
Castles financial advisor met with Ryerson and Platinum,
and the board evaluated their offer as well as alternatives to
a sale, directors determined that it was in the best interest
of shareholders to continue running the company "as a
standalone entity under the leadership of Scott Dolan,"
Dolan was appointed president and chief executive officer
Oct. 15 (
amm.com, Oct. 16), succeeding Michael H. Goldberg,
who resigned in July following a string of financial
"The board is wholly committed to building longer-term
shareholder value," Anderson said, adding that it views the
long-term direction of the company "extremely positively."
He suggested that Dolans experience turning around
struggling units for General Electric Co. and United Airlines,
combined with his energy and customer skills, were strong
reasons for Castle to continue as an independent company.
During the conference call, Dolan promised a strategic
review of Castles operations over the next 90 days to
align them more closely and develop process and other
A Platinum Equity executive referred questions to Ryerson,
whose executives couldnt be reached for comment
A steel distributor who closely observes the industry said
the merger wouldnt have meant much in the flat-rolled
market but would have added specialty products customers and
expertise to Ryersons stable.
As a full-line supplier, "it would have made them incredibly
competitive with many other Chicago service centers and those
who want to come into the Chicago market," he said. On the
other hand, "large service centers getting bigger isnt
necessarily better. When youre that big, there are fewer
synergies to get rid of and little that you can do to improve a
poorer-performing partner." Plus, "I dont see them as
having huge compatibility."
He noted that if Castle fails to boost profits down the
line, even under new energetic leadership, "Ryerson could get
them very cheap."