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Coachmen, Forest River Working out Details

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November 24, 2008 by   Comments Off on Coachmen, Forest River Working out Details

Forest River Inc.’s continues to work out details on its announced acquisition of Coachmen Industries Inc.’s recreational vehicle business, according to a report in the Goshen News.
Thomas Gehl, Coachmen’s secretary and director of investor relations, said the company will file paperwork with the Security and Exchange Commission (SEC) that will outline the purchase. Once the SEC approval is received, then a shareholders meeting to vote on the sale will be held.
Gehl said the shareholders meeting will be one of the most important steps to getting the sale done.
Major shareholders include institutional investors and the Corson family, which founded Coachmen, Gehl indicated. There are 15.9 million shares of Coachmen stock. If shareholder approval is received, the sale should occur quickly after that, Gehl said.
He also put numbers to the percentage of workers who will be retained with Coachmen’s housing or specialty vehicle groups. The company has about 600 workers in its RV section and 510 will be retained by Forest River. The other 90 employees will be able to interview for jobs at Coachmen’s All-American Homes housing plant, the corporate office and at Forest River.
Coachmen will retain the All-American Homes operations, the core of its housing group, which posted a profit in the third quarter.
“It’s a tough market (housing) and we have been very fortunate that our housing group has been profitable for the first three quarters,” Gehl said.
The company’s stock hit a low this week when it traded for below $1. On Thursday the stock sold for just 57 cents a share. Several years ago the company’s stock sold for just under $20 per share.
Gehl blamed the low stock price on speculators buying short and hoping the price would go down.
He found it hard to believe the stock went so low when shareholder value is $6.50 to $6.75. Shareholder value is the price shareholders would receive per share if the company’s assets were liquidated.
“People who were betting against the company were selling short,” he said.
Gehl said Coachmen was rated first in the number of short sells on the New York Stock Exchange in the past year.
But those selling Coachmen short may have gotten a surprise Friday. The announcement of the sale resulted in a 90% gain in stock price, with the closing price being $1.08.
Gehl said that Coachmen officers discussed a sale with several companies recently before settling on the Forest River deal. He believes that Forest River is a good match for the Coachmen RV brands, which he said have good reputations among consumers.
He said Forest River, a Berkshire Hathaway Inc. subsidiary, is a well-run and well-capitalized company that will be able to promote the Coachmen brands.
“I hope it gives the employees a lot of comfort…” Gehl said of Forest River’s financial stability.

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