A securities class action has been filed against Masonite International Corporation (DOOR) on behalf of all sellers of the common stock of Masonite between June 5, 2023 through February 8, 2024. This case has been filed in the USDC – SDNY.
On June 5, 2023, Owens Corning approached Masonite with a credible offer to acquire all of the Company’s outstanding stock for $120.00 cash per share – a significant cash premium over Masonite’s then stock price of $94.09 per share. Confirming the seriousness of Owens Corning’s offer, Masonite’s Board of Directors (the “Board”) created an “Advisory Committee” of certain directors and senior management, including defendant Heckes (defined below), which would, among other things: (i) consider retention of experienced financial advisors; (ii) analyze the proposal; and (iii) prepare materials and analysis to assist the Board in evaluating and responding to the proposal. The Board eventually engaged with Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”) and Goldman Sachs & Co. LLC (“Goldman Sachs”) for legal and financial advice. At the same time Defendants were evaluating and seriously considering the first credible offer from Owens Corning, Defendants repurchased over 79,000 shares of its own shares in just one month at an average price of $90.15 per share.
Although Masonite declined the first offer, Defendants continued to engage with Owens Corning, which was determined to acquire the Company and returned with repeated offers at significant premiums to Masonite stock’s market price, culminating in Owens Corning’s acquisition of Masonite at a significant premium in February 2024.
Defendants’ violations continued throughout the Class Period, as they failed to disclose the subsequent offers made by Owens Corning. In total, Owens Corning made six offers to acquire Masonite: (i) on June 5, 2023, for $120.00 cash per share; (ii) on July 13, 2023, for $128.00 cash per share; (iii) on September 25, 2023, for $132.00 cash per share; (iv) on November 20, 2023, for $120.000 cash per share; (v) on January 3, 2024, for $132.00 cash per share; and (vi) on January 31, 2024, for $133.00 cash per share. Defendants seriously considered each proposal and continued to engage with Owens Corning even after rejecting a proposal, in the hopes of receiving an improved offer. Contemporaneous with most of these credible offers from Owens Corning, Defendants continued to repurchase Masonite shares throughout the Class Period. Specifically, as reported in the Company’s SEC filings, Masonite repurchased: (i) approximately 106,000 shares for an average price of $94.05 per share during the third quarter of 2023; and (ii) approximately 83,000 shares for an average price of $88.88 per share during the fourth quarter of 2023, despite knowing that Owens Corning was offering a significant premium to Masonite’s then stock price.
The complaint alleges Defendants’ material omissions and misrepresentations concerning Owens Corning’s offers to purchase all of Masonite’s outstanding common stock at significant premiums to the Company’s stock price and the Company’s repurchases of millions of dollars’ worth of its shares without disclosing material nonpublic information about Owens Corning’s offers, which, if disclosed as required, would have indicated to investors that Masonite’s stock was worth significantly more.