Target Hospitality's stock tumbles 20% after buyout committee disbanded
By Ciara Linnane
Arrow Holdings did not follow through on unsolicited bid for company after it lost a government contract
Target Hospitality Corp.'s stock tumbled 20% on Wednesday, after the provider of modular housing said it has disbanded a special committee created to review a buyout offer after the bidder failed to follow through on its offer.
The Woodlands, Texas-based company (TH) formed the committee in June after receiving an unsolicited bid from Arrow Holdings, a unit of TDR Capital, to buy the shares it did not already own for $10.80 each. The stock closed Tuesday at $9.44.
The company also announced in June that the U.S. government would terminate the South Texas Family Residential Center contract, which had contributed about $55.9 million in revenue in 2023.
Following that announcement, the company launched a formal process to solicit bids and invited Arrow to participate. However, following the news of the loss of contract, no offers were received and Arrow neither reaffirmed its offer nor offered any alternative that the committee could conclude would be more attractive to shareholders than the company's stand-alone prospects.
"The company will continue to focus on allocating capital to high return initiatives, including in-organic growth," it said in a statement.
Chief Executive Brad Archer said underlying business fundamentals remain strong and the company backed its 2024 guidance.
"The conclusion of the evaluation process of the TDR Offer restores our full flexibility to pursue multiple capital allocation opportunities focused on maximizing value," he said.
The stock is down 22% in the year through Tuesday's close, while the S&P 500 SPX has gained 20%.
-Ciara Linnane
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
09-25-24 0947ET
Copyright (c) 2024 Dow Jones & Company, Inc.-
What’s the Difference Between the CPI and PCE Indexes?
-
Micron Earnings: Great Guidance but Stock Now Looks Fairly Valued
-
August PCE Report Forecasts Show More Good News on Inflation
-
AI Stocks May Be Down, but Don’t Count Them Out
-
4 Stocks to Buy as the Fed Cuts Interest Rates
-
Markets Brief: The Uncertain Path to Neutral Interest Rates
-
What’s Happening in the Markets This Week
-
Where Top Stock Fund Managers Are Looking Next After the Fed Rate Cut
-
Our Top Pick for Investing in US Renewable Energy
-
Undervalued by 25% and Yielding 5%, This Stock Is a Buy
-
Can AI Predict Future Stock Returns?
-
The Best Energy Stocks to Buy Now
-
10 Undervalued Wide-Moat Stocks
-
Obesity Drugs: Can New Firms Take Market Share From Eli Lilly and Novo Nordisk?
-
New 4-Star Stocks
-
Intel Fair Value Left Unchanged Despite Qualcomm Takeover Talk