Lear Corporation, a global supplier of automotive seating, electronics, and electrical distribution systems, has agreed to be acquired by American Real Estate Partners, L.P., an affiliate of private equity investor Carl C. Icahn, for $36 per share. The transaction, valued at approximately $5.3 billion including assumption of debt, is expected to close by the end of the second quarter, although Lear may solicit alternative proposals for a period of 45 days, and may respond to unsolicited proposals.
Lear chairman and chief executive officer Bob Rossiter said in a statement that the board believes the transaction price “provides shareholders with significant value.” He said the price represents a multiple of “about 9x our forecasted 2007 core operating earnings – excluding the Interior business.” He added that the firm intends to solicit other offers “to ensure that value is maximized for all of our shareholders."
One large investor, Pzena Investment Management LLC, reportedly expressed "alarm" over the Icahn offer and rates the company’s long-term value nearer $60 per share.
"Lear is an excellent company with a strong management team in place," Carl Icahn said in a statement. "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."
Lear had net sales of $17.8 billion in 2006.