EXHIBIT 99.1
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BMCA NEWS
Building Materials Corporation of America 1361 Alps Road, Wayne, NJ 07470
973 628-3000
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FOR IMMEDIATE RELEASE
FOR MORE INFORMATION, CONTACT BUILDING MATERIALS CORPORATION OF AMERICA AT
973-317-5960
BMCA PROPOSES BUSINESS COMBINATION TO ELKCORP
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November 6, 2006 - Building Materials Corporation of America ("BMCA"), North
America's largest roofing manufacturer, which operates under the name GAF
Materials Corporation, today sent a letter to Thomas D. Karol, Chairman of the
Board of Directors and Chief Executive Officer of ElkCorp (NYSE: ELK) indicating
its interest in pursuing a business combination with ElkCorp at an all cash
price to be negotiated.
The letter sent today to Mr. Karol by BMCA follows:
Mr. Thomas D. Karol
Chairman of the Board and Chief Executive Officer
ElkCorp
14911 Quorum Drive, Suite 600
Dallas, Texas 75254-1491
Dear Tom:
As we advised you last week and again on our Sunday conference
call, we have a strong interest in pursuing a business combination with Elk at
an all cash price to be negotiated. We believe that a combination of our two
companies provides Elk shareholders with the opportunity to realize full value
for their shares because of the unique synergies that exist between our two
businesses which are an excellent fit for each other. For this same reason, the
combination will provide significant benefits to Elk customers and employees.
As you know, in addition to the extremely difficult operating
environment we in the roofing industry now confront -- resulting from
unprecedented asphalt costs, margin erosion, and excess inventories -- the
industry faces significant long-term challenges as well. It is now readily
apparent that, in the last few years, aberrational demand from weather-related
events temporarily obscured the impact of higher costs and slowing industry
growth, especially in the maturing market for laminated shingles. In our view,
consolidation is the only logical response to these conditions.
We have always held Elk and its employees in the highest
regard, having known each other as competitors, suppliers, and friends. In
recent months, we have carefully studied this combination and believe that Elk
and BMCA are uniquely complementary. The limited overlap among customers and
distribution channels, as well as the geographic fit of our companies'
respective facilities, offer an opportunity to enhance the combined company's
competitive position by achieving economies of scale and improving our ability
to respond to customer needs to a degree that would not be available to either
company on a stand-alone basis or with any other partner.
As a combined company, we would lead the industry as the
lowest-cost roofing manufacturer in the country, able to deliver product quickly
and efficiently to customers in every section of the country. Our customers
would also benefit from access to the most comprehensive product offering in
roofing, the industry's oldest and most developed contractor programs, and two
of the industry's most trusted and respected brand names. Finally, bringing
together our companies' world-class employees, who have driven exceptional
innovation and strong historical growth at both our companies, will ensure that
the combined company competes effectively in the marketplace whatever challenges
we face going forward.
We have invested a significant amount of time and money in the
evaluation of a transaction between our companies. Since our companies have
known each other for many years, we are quite familiar with your business, as we
know that you are with ours. With your cooperation, after conducting reasonable
confirmatory due diligence, we expect to be in a position to promptly provide an
appropriate offer to you and your shareholders. As discussed on our conference
call, we are willing, of course, to execute a customary confidentiality
agreement. In addition, you should know that as a result of our discussions with
lenders, we are confident that satisfactory financing for the transaction is
readily available and our offer will not be subject to a financing contingency.
Finally, you should be aware that we and our advisers have
thoroughly considered the antitrust implications of this transaction, and we are
highly confident that there will not be any antitrust impediments to completion.
In that regard, we are filing today a Hart-Scott-Rodino notification with the
Federal Trade Commission and the Antitrust Division of the United States
Department of Justice.
We are sorry that the New York Marathon prevented our meeting
in person yesterday, but we appreciated the opportunity to present our proposal
by teleconference instead. I look forward to our continued discussions.
Sincerely,
/s/ Robert B. Tafaro
Robert B. Tafaro
President and Chief Executive Officer
P.S. I am enclosing a copy the 13D filing reflecting our Elk stake.
Enclosure
cc: The ElkCorp Board of Directors
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BMCA INFORMATION
Building Materials Corporation of America, which operates under the name of GAF
Materials Corporation, is an indirect subsidiary of G-I Holdings Inc. With
annual sales in 2005 approximating $2.0 billion, BMCA is North America's largest
manufacturer of residential and commercial roofing products and specialty
building products.
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This news release is for informational purposes only and is not an offer to buy
or the solicitation of an offer to sell any ElkCorp shares, and is not a
solicitation of a proxy.
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FORWARD-LOOKING STATEMENTS
This release contains some forward-looking statements as defined by the federal
securities laws which are based on our current expectations and assumptions,
which are subject to a number of risks and uncertainties that could cause actual
results to differ materially from those anticipated, projected or implied. We
undertake no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or otherwise.