In this public relations release from Globe Newswire you can read that Axar Capital Management has withdrawn its proposal to acquire all of the outstanding shares of StoneMor Inc. and take the company private.
In the press release, StoneMor made this announcement by Stephen J. Negrotti, Chair of a special committee to evaluate the Axar proposal, “We have worked closely with Axar over the last six weeks to evaluate its most recent proposal. We have consulted with our financial and legal advisors throughout the process. Despite these efforts, there remained a substantial difference regarding the valuation of the Company.”
StoneMor Inc. also announced in the press release that the company will be bringing to the shareholders at their annual meeting a proposal for a 1 for 10 reverse stock split of the company’s shares.
Another item in the press release is that StoneMor Inc. announced the addition of Kevin D. Patrick to its Board of Directors. According to the release, Mr. Patrick has been Senior Vice President, Chief Financial Officer and Treasurer of Colonial Williamsburg Foundation since August 2017.
Andrew Axelrod, StoneMor’s Chairman of the Board said this about Mr. Patrick, “We are excited to welcome Kevin to the Company’s Board of Directors. His experience as a Chief Financial Officer, particularly in regards to corporate development, business turnarounds and financing strategies, is a perfect match as StoneMor looks to the future.”
Again, according to the press release, StoneMor Inc. is the owner and operator of 319 cemeteries and 88 funeral homes in the United States and Puerto Rico.
Funeral Director Daily take: For some time we have wondered what is going to happen with StoneMor. Over the last few years it was apparent to anyone who followed the company that it was in a financial decline. My point of view considered options like selling the company whole, selling off pieces of the company, or trying to right the ship and moving forward as a profitable going concern.
I only know what I know, read, and analyze, but it appears that in the last year, through some strategic asset sales and also some strategic operational moves – such as contracting out cemetery services – that the company is finding its footing to move forward as a going concern. It appears that the hemorrhaging of cash has subsided to rates that may be tolerable for the near future and the company is ramping up sales and marketing.
If you are one who wants StoneMor to succeed as a going concern, I think this press release is optimistic news. From our point of view, there was much better odds of piece by piece selling if Axar had total control and secondly, it appears that the choice of Mr. Patrick on the board seems to show a movement towards “fixing what we’ve got” and moving forward.
Only time will tell.