Inc., Troy, MI, wants to own Dana Corp. and announced this week
that in order to do that, it will try to acquire all outstanding
shares of the Toledo, OH-based company.
Yost, chairman and CEO of ArvinMeritor, wrote in a July 8 letter
to the president and CEO of Dana Corp. that the ArvinMeritor board
was surprised and disappointed when, in response to repeated efforts
to effect a business combination of the two companies, Dana said
it had "no interest whatsoever" in pursuing a transaction.
June, Yost offered $14 a share but says the offer made it no further
than the Dana Board of Directors. This week, Yost informed Dana’s
CEO in the letter that he was prepared to go straight to the shareholders
with an offer of $15 per share in cash.
offer is 56 percent higher than Dana's stock price at the end of
the day June 3, 2003, the last trading day before ArvinMeritor submitted
its first proposal to Dana in writing. It is 39 percent higher than
Dana's average closing stock price for the last 30 trading days,
and 25 percent higher than Dana's stock price at the end of day
July 7, 2003, the last trading day before the company’s announcement.
proposed transaction has a total equity value of about $2.2 billion.
Dana has $2.2 billion in other interests that bring the total enterprise
value to about $4.4 billion.
stated, "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
would prefer to meet with the Dana board and its advisors to discuss
our all-cash offer and negotiate a mutually acceptable transaction,”
he said. “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."
noted the offer would 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.
“poison pill” is a tactic designed to make a hostile corporate takeover
too expensive to complete. It can involve a shareholder rights plan
to prevent someone from buying more than a certain percentage of
a company's stock without management approval, or a plan that would
offer current stockholders bargain-priced shares if another company
purchases a high percentage of the stock.
to Yost, ArvinMeritor’s full terms and conditions will be contained
in a formal Offer to Purchase that will be filed with the Securities
and Exchange Commission and mailed to Dana's shareowners.
a related action, ArvinMeritor 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.
currently owns 1.1 million shares of Dana's common stock.
the Land Line staff