H.B. Fuller rejects Ancora's revised $1.4B adhesives business bid

H.B. Fuller (FUL) said Monday its board unanimously rejected a second unsolicited takeover proposal from Ancora for its Building Adhesive Solutions business, arguing that the revised offer of $1.2 billion to $1.4 billion in cash undervalues the division.

Fuller's shares rose 3% in premarket trading Monday after the adhesives manufacturer also announced plans to explore potential sales of selected businesses, with proceeds earmarked for debt reduction.

The board determined that Ancora's modest increase over its previous offer failed to reflect the division's organic growth prospects, its importance to Fuller's broader operations and potential benefits from the company's Project Quantum Leap initiative. Directors also cited a lack of key details in the nonbinding proposal, which they characterized as highly conditional.

For investors, the rejection signals that Fuller isn't prepared to sell a major business at Ancora's proposed valuation, although the company is leaving the door open to smaller asset sales. The planned review could provide a way to reduce debt without sacrificing a division that management considers important to its longer-term strategy. It also raises questions about whether Ancora will return with a higher offer.

Fuller (FUL) said it will conduct a market check involving selected business segments and product lines that are less central to its portfolio and strategic priorities. The company intends to use any proceeds from potential transactions to reduce leverage.

The review will examine the feasibility of separating individual businesses, including potential tax consequences, stranded costs, operational disruptions and any effects on the execution of Project Quantum Leap.

Fuller (FUL) expects to complete the market check by the end of 2026. The company hasn't identified which businesses might be sold or provided estimates of potential proceeds.