Representing its partners and clients, Avenue has voiced strong opposition to the merger at the proposed price of $290 per share, arguing that it significantly undervalues Encore Wire’s long-term potential and would be disadvantageous for long-term investors.
Teich also praised Encore Wire’s consistent profitability through various economic cycles, its high returns on invested capital, low capital intensity, and strong pricing power.
He lauded the company’s prudent capital allocation strategy, notably its share repurchase program, which has historically benefited shareholders.
In the shareholder correspondence, Avenue included a detailed analysis projecting Encore Wire’s future performance over the next decade in three scenarios.
The analysis suggested that the present value of Encore Wire’s share price after ten years would surpass the proposed $290 merger price, even under conservative estimates.
