Lear Agrees to Icahn's Offer
Icahn's American Real Estate Partners L.P last Monday bid $36 a share for the company sending shares up as much as 15%.
At last check, Lear's stock traded down $2.02 to stand at $38.05 after being halted pending the news a day earlier.
"We look forward to working with Lear's team to improve its long-term competitiveness, capitalize on growth opportunities globally and to build an even stronger and more valuable company in the future," Icahn said in a statement.
The offer was met with "strong opposition" from Pzena Investment management, which holds a 10.1% stake in Lear. Pzena said Monday it believes the company's value to be closer to $60 a share with earnings likely to recover to $4 a share in the next few years.
Lear, however, said it expects the deal to close by the end of second quarter.
"We believe that the transaction price ... provides shareholders with significant value," said Chairman and CEO Bob Rossiter in a statement.
The price represents a multiple of about nine times management's projected core operating earnings for 2007, excluding the interior business, he said.
"Furthermore, we intend to solicit other offers to ensure that value is maximized for all of our shareholders," Rossiter added.
The company noted that terms of the deal allow Lear's board to explore alternative proposals from third parties for a period of 45 days from the execution of the agreement. If Lear accepts what was termed a "superior" proposal.