(Adds offer value, share price, background, details)
NEW YORK, Nov 19 (Reuters) - Sherwood Investments Overseas Ltd proposed buying out synthetic fuels and fertilizer technology company Rentech Inc RTK.A for $2.70 per share, the investor said in a letter to the company on Monday.
The offer would value the company, whose shares had sunk as low as $1.72 on Friday, at $441 million, based on the 163.27 million shares reported outstanding as of Aug. 6.
Sherwood said it currently owns 4.675 million shares of Rentech, or about 2.86 percent of the outstanding shares.
The company, which has never earned a profit, said in its most recent quarterly filings with the U.S. Securities and Exchange Commission it would need to raise significantly more cash than it had on hand to fund its projects.
In the letter addressed to Rentech President and Chief Executive Hunt Ramsbottom, Sherwood said the company’s stock was suffering, despite gains posted by other fertilizer companies.
“We are concerned that your weak share price may hinder your ability to execute your business plan and suggest that you should consider either taking the company private or spinning off the fertilizer operation,” Sherwood said.
Rentech shares jumped more than 32 percent on the news before paring gains to trade at $2.06 per share, up 17 percent, on the American Stock Exchange. (Reporting by Matt Daily; Editing by Brian Moss)