Dana spurns ArvinMeritor’s takeover bid

July 23, 2003
Dana Corp’s board of directors has rejected ArvinMeritor Inc’s hostile takeover attempt, calling ArvinMeritor’s offer inadequate from a financial point
Dana Corp’s board of directors has rejected ArvinMeritor Inc’s hostile takeover attempt, calling ArvinMeritor’s offer inadequate from a financial point of view to Dana’s stockholders.

“There is virtually no rationale for accepting this offer, which represents inadequate value and a high level of risk for shareholders,” said Joe Magliochetti, Dana chairman and chief executive officer, in a press release.

ArvinMeritor said July 9 that it intended to acquire all the outstanding shares of Dana for $15 per share in cash. The proposed transaction had a total equity value of about $2.2 billion. ArvinMeritor said the $15 a share offer was 56% over Dana’s closing stock price June 3 and 25% over the July 8 closing stock price.

Dana also cited the significant financing risks and serious antitrust concerns raised by the offer that could prevent its completion. The firm said Dana and ArvinMeritor are the only substantial North American producers of axles, driveshafts, and foundation brakes for medium- and heavy-duty trucks, with combined market shares ranging from 80% to 100%.

ArvinMeritor said it is committed to the transaction even though Dana “refuses to negotiate” with it.

“Our offer permits Dana’s shareowners to realize an attractive cash value for their shares today without bearing the risks of Dana’s long-term restructuring efforts,” ArvinMeritor said in a press release.

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Tim Parry

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