Ancora urges H.B. Fuller to conduct broad review after rejecting $1.2 billion to $1.4 billion offer
Key Facts
Ancora urged H.B. Fuller’s board to conduct a broad review of strategic alternatives, including a sale of the entire company, in a letter dated October 27. The call came after the board rejected the group’s revised offer to buy the Construction Adhesives business for $1.2 billion to $1.4 billion in cash. Ancora said it was reserving its rights regarding upcoming deadlines and the possibility of making an offer to acquire the whole company. But it did not announce a final or binding offer for H.B. Fuller in the letter. Pressure that began over the sale of one business has thus shifted to a broader debate about the company’s future, while a full-company deal remains a possibility raised by the group, not an announced agreement.
The business offer was the focus of the dispute between the parties before Ancora’s latest letter. On August 12, H.B. Fuller confirmed it had received an initial offer from the group of $1.1 billion to $1.2 billion in cash for the Construction Adhesives business. The board rejected the offer on August 24, saying its proposed value was below the business’s worth and did not reflect its full value. After a revised offer was submitted, the board rejected it again on October 19; the revised offer valued the business at $1.2 billion to $1.4 billion in cash. Ancora said the board had not engaged with its proposal appropriately, while the company said the board evaluated the offer with the help of independent financial and legal advisers, so the characterization of a lack of engagement remains attributable to the group.
H.B. Fuller’s board explained its rejection by saying the offer did not adequately reflect the business’s value, citing its organic growth, its position within the company’s platform and the gains targeted by Project Quantum Leap. The board said the offer “continued to lack key details, leading the board to conclude that its terms were heavily conditioned on outstanding matters.” In the second quarter of 2026, the business posted annual organic growth of 6% and a 10% improvement in earnings before interest, taxes, depreciation and amortization, according to the company when it rejected the first offer. The business also shares manufacturing operations with H.B. Fuller’s other businesses at more than 30 plants worldwide. The company says any separation could create operating inefficiencies, as well as separation costs, tax effects and risks to execution of its initiative.
In contrast, H.B. Fuller announced it would conduct a market review of businesses and products less integrated into its portfolio and strategy, with any potential proceeds directed toward debt reduction. The company said it would assess separation costs, taxes, operating inefficiencies and the effect of any separation on execution of Project Quantum Leap. It set the end of 2026 as the expected completion date for the market review. This process differs from Ancora’s call for a review of the entire company, as the company’s process focuses on assets less connected to its portfolio and does not mean it has agreed to sell the Construction Adhesives business. The review’s outcome, and whether it leads to asset sales, will be among the milestones ahead of the deadline set by the company.
The Construction Adhesives business accounted for about 25% of H.B. Fuller’s revenue in fiscal 2025, with revenue of $860 million, compared with $856.5 million in the prior fiscal year. In third-quarter results announced by the company on September 23, total revenue was $938 million, up 5.2% year over year, while revenue from the business rose 5.5%. The portfolio review comes amid financing steps related to the company’s acquisition of Advanced Medical Solutions; on October 8, it announced pricing for new notes with a face value of $850 million, a 7.625% interest rate and a 2034 maturity. The company said the proceeds would help fund the acquisition and repay other borrowings, as well as fund repayment or redemption of notes due in February 2027. H.B. Fuller had forecast returning leverage to its target range of 2.5 to 3.0 within two years of completing the Advanced Medical Solutions deal.