OpTree

Gull Holdings, founded and led by Myron Wentz, the Founder and CEO of USANA has raised their bid to take USANA private. The new bid is a two dollar increase over the previous bid, taking it to $28 dollars per share (which we still don’t think is nearly enough). The original bid of $26 dollars per share was unanimously rejected by both the minority shareholders, and a special committee appointed by the board to review the bid.

In the last week, USANA has been faced with not one, but two lawsuits by minority shareholders who feel that Gull Holdings along with Wentz and other majority shareholders, are trying to low ball the minority shareholders and are underestimating the future value of the company. Both lawsuits are now in court seeking approval to become class action suits.

The Wentz family, along with other majority shareholders control 68% percent of the company. After the initial bid was rejected, Wentz stood firm saying that they would not increase the bid. However, with increasing pressure from the special board committee and the remaining shareholders, “Wentz has given in”.

Because one of the original goals in taking the company private was to eliminate frivolous lawsuits, it is a smart move on Gull’s part to increase the bid before the two pending lawsuits became worse. Gull has said that this is the highest price permitted to meet its debt financing commitment but we firmly believe it wont be nearly enough. In January of this year, the stock was trading at $43 per share so to think the shareholders will take such a discount seems impractical. Hopefully the two sides can reconvene and come to an agreement soon.

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