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The Shareholder Forumtm

support for fair value realization

of stock investments in

DBM Global Incorporated

(f/k/a Schuff International Inc.)



Support of Minority Shareholder Interests

The Shareholder Forum had offered to support Appraised Value Rights ("AVR") of DBM (f/k/a Schuff International) minority shareholders in 2014 following a $31.50 per share tender offer by the company's controlling shareholder, HC2 Holdings, Inc., with the stated intent to proceed with a short-form merger "as soon as practicable.”

HC2 acquired DBM shares in the 2014 tender offer and other purchases bringing its total holdings to 92% of outstanding DBM shares, but has not proceeded with a merger. The Forum has continued to support the minority shareholder interests of its AVR participants in this context.




Forum reference:

Reactions to proposed buyout of minority shareholders


Source: New York Post, August 29, 2014 article

Falcone’s tactics in buying steel company draw fire

By James Covert and Kaja Whitehouse

August 29, 2014 | 3:00am

Wall Streeters are grousing about what they see as shady tactics in billionaire Phil Falcone's purchase of the OTC-listed steel company,

Schuff. Photo: Reuters

Phil Falcone couldn’t play by the rules on Wall Street — so now he’s playing where there aren’t any rules.

That’s the charge from critics as the hedge-fund tycoon moves to take over a little known but profitable steel fabricator whose shares are traded in the loosely regulated over-the-counter market.

Falcone, who last year agreed to settle a clash with regulators that got him barred from the securities industry for five years, is using ruthless tactics to acquire the company, Schuff International, on the cheap, according to rankled investors.

He is doing this through his new investment vehicle, HC2, created this spring from a shell company that’s also off the exchanges.

Last week HC2 floated a tender for Schuff shares to consolidate its ownership in the firm.

That’s less than three months after a surprise May 30 announcement that HC2 had acquired a 65 percent stake.

HC2’s offer, at $31.50 a share, values Schuff at about $135 million — below where its shares have recently traded, critics bark. Such a move is known as a “takeunder.”
HC2 is offering to buy the stock at that price because that is where it bought its now 70 percent stake from the controlling Schuff family several months ago, a person close to HC2 told The Post.

“We are not forcing anyone to do anything,” this person said regarding the tender offer. “They can either tender or not.”

Schuff officials did not respond to a request for comment.

Falcone, who was quietly named Schuff’s chairman after HC2 acquired its stake, is exploiting lax disclosure requirements in the offer, according to some securities experts.

“It’s a highly self-interested approach, the result of which is to leave bodies by the side of the road,” says Randy Katz, a securities lawyer at Baker Hostetler.

A key concern is that many owners of over-the-counter stocks aren’t aware of their rights when they receive such offers, including the fact that they have the right to reject them, Katz said.

If Falcone manages to acquire 90 percent of Schuff’s shares, he may be permitted, under Delaware law (where the company is incorporated), to force remaining shareholders to sell at a similar price, a tactic known as a “squeeze out.”

“Most investors don’t have a clue what’s going on,” Katz said. “It’s an enterprise ripe for [Falcone] to come in and take over without paying full or fair value.”

The offer from HC2 — said to be named after Harbinger Capital, the fund that Falcone was forced to leave last year after bilking its investors, amid other violations — has already attracted the attention of three different class-action securities law firms due to the low price.

In a recent post on the investor social-networking site SumZero, one blogger argued that Schuff could be worth $57 to $101 a share, citing a vigorous project backlog that includes Apple’s new “spaceship” headquarters in Cupertino, Calif.

Projects built by Schuff, which employs 1,300 people, according to its Web site, include the University of Phoenix Stadium and attractions at Walt Disney’s Epcot Center.

Its shares on Thursday closed at $32.25, unchanged.

© 2014 NYP Holdings, Inc.



The project supporting investor interests in DBM Global Incorporated (f/k/a Schuff International, Inc.) is being conducted by the Shareholder Forum for the benefit of Participants that have reserved Appraised Value Rights ("AVR") Management, subject to conditions including standard Forum policies that each Participant is expected to make independent use of information obtained through the Forum and that participation is considered private unless the Participant specifically authorizes identification.

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