The offer from EM Holdings, which is substantially owned by Emachines director Lap Shun (John) Hui, represents a significant premium to the 43 cent value of the stock on Friday, when the offer was made public.
Hui, who runs monitor distributor KDS USA, first made the offer on Oct. 30, but EM holdings said in a statement Friday that it received no response from the company. The original offer expired Nov. 6, but EM Holdings has extended the offer until 5 p.m. Wednesday.
"Our proposal presents the best opportunity for the company to achieve its goal of maximizing shareholder value for all of its shareholders." Hui said in the statement. "The proposed price represents a substantial premium to the current market price and would be the highest premium paid for any transaction reported so far this year...It also represents a substantial premium to our estimate of the liquidation value of the company's assets, after taking into account reasonable liquidation scenario reserves, costs and fees."
Emachines announced the offer in a press release, adding that it has retained Credit Suisse First Boston to evaluate the offer and other alternatives. The company had hired CSFB before to explore the company's options but dismissed the firm in September.
The Irvine, Calif.-based PC maker warned in its statement that "there can be no assurance that Emachines will proceed with a transaction with EM Holdings or any of the other strategic alternatives considered."
The offer was also mentioned in a filing Tuesday with the Securities and Exchange Commission.
The company has fallen on hard times. It has seen the departure of founder and CEO Stephen Dukker in February, the delisting of its stock from the Nasdaq exchange in May after consistently trading below $1, and a continuing slump in the PC business. Since May it has traded on the over-the-counter bulletin board.
EM Holdings said its proposal has received the support of major Emachines stockholders including TriGem America, Korea Data Systems America and Idealab Holdings. Collectively, those companies and certain individuals affiliated with them own 55 percent of Emachines shares. EM Holdings said if its offer is accepted, it believes the deal could close in 60 days.