(Reuters) - Candle maker Blyth Inc BTH.N rejected an unsolicited acquisition proposal from direct seller CVSL Inc CVSL.PK, saying the offer was not supported by committed financing and may leave it saddled with debt.
CVSL last month proposed to acquire Blyth for $16.75 per share, or about $270 million.
CVSL advisers indicated that the company did not have the capacity to raise more debt, Blyth said. Any debt raised to finance the deal would therefore be based on Blyth’s leverage capacity, the company said in a statement.
The offer also required the company to use its cash to repay existing debt and did not address its working capital needs, Blyth said.
“Based on the Blyth board’s initial comments, it is not clear to us that they have a full understanding of our proposal,” Chairman of CVSL’s investment committee John Rochon Jr. said in a statement later on Friday.
The company said it would amplify its proposal to Blyth in due course.
CVSL, formerly Computer Vision System Laboratories Corp, sells hand-crafted baskets and a line of products for the home, including pottery and cookware, through a network of independent sales representatives.
Blyth has retained Wachtell, Lipton, Rosen and Katz as legal advisers and Jefferies LLC as financial advisers.
Blyth’s shares closed down 4 percent at $12.00 on the New York Stock Exchange on Friday.
Reporting by Aditi Shrivastava and Maria Ajit Thomas in Bangalore; Editing by Don Sebastian