In what has been described as a hostile takeover attempt, ArvinMeritor Inc. today announced that it intends to commence a tender offer to acquire all of the outstanding shares of Dana Corp. for $15 per share in cash, which it said is a premium of 56% over Dana’s closing stock price on June 3 and a premium of 25% over yesterday's closing stock price.
The proposed transaction has a total equity value of approximately $2.2 billion assuming 148.6 million shares of Dana outstanding, ArvinMeritor said. In addition, Dana has net debt and minority interests of approximately $2.2 billion, accounting for Dana Credit Corp. on an equity basis, bringing the total enterprise value to approximately $4.4 billion.
The transaction is anticipated to be significantly accretive to ArvinMeritor’s earnings per share in the first year after the transaction closes.
"We believe that to succeed in today’s increasingly global and competitive automotive supplier industry, we must take actions that will increase the opportunities available to our company in the future and enhance value for our shareowners, customers and employees," ArvinMeritor chairman & CEO Larry Yost said in a statement.
"We would prefer to meet with the Dana Board and its advisors to discuss our all-cash offer and negotiate a mutually acceptable transaction; however, Dana has rejected our prior proposals and refused our requests to enter into discussions. Therefore, we believe it is necessary to take our offer directly to Dana’s shareowners," Yost continued.
Yost added that a combined ArvinMeritor-Dana will have a more diversified product mix and a balanced customer base. He noted that the combined company will have the increased capability to accelerate growth, make strategic investments, and enlarge our diversified portfolio of products and services.
ArvinMeritor noted that the offer will be conditioned upon, among other things, the removal of Dana’s poison pill, acceptance by more than two-thirds of Dana’s shares, receipt of necessary regulatory approvals, obtaining necessary financing and other customary conditions.
In addition, ArvinMeritor also today filed a lawsuit against Dana and its board of directors in the Circuit Court for the City of Buena Vista, VA, asserting, among other things, that Dana’s board breached its fiduciary duties to Dana’s shareowners when it rejected ArvinMeritor’s proposals without meeting with ArvinMeritor.
ArvinMeritor currently owns 1,085,300 shares of Dana’s common stock.