Auto parts maker Lear said on Tuesday it has received no bids to rival billionaire financier Carl Icahn's buyout offer but continues to talk to parties who have expressed interest.
Lear's board in February agreed to a $2.3 billion, or $36 a share, takeover by Icahn, well known as an activist investor and Lear's largest shareholder with a roughly 16% stake. The deal is worth $5.3 billion including debt.
The deal with Icahn's American Real Estate Partners included a 45-day period in which the maker of automotive seating and electronics can solicit competing bids.
The period expired Monday night.
However, the Icahn agreement allows Lear to continue discussions indefinitely with parties who expressed interest in exploring a bid during the 45-day period, and Lear can accept unsolicited offers as well, a company spokesman said.
"We can continue them (current discussions) as long as they are active," Lear spokesman Mel Stephens said. He declined to identify the parties or even say whether they were other companies or private investors.
Morningstar analyst John Novak said expressions of interest were not surprising, nor was the failure of a competing bid to surface given the short timeframe and the management support for the Icahn offer.
"I still say a competing bid is unlikely, but the door is not completely closed," Novak said. "You can't completely rule it out."
Shareholders In Opposition
Several shareholders have said Icahn's offer severely undervalues Lear, which had a net loss in 2006 but is divesting a money-losing auto interiors business and restructuring other units to cut costs.
Richard Pzena, co-chief investment officer of Pzena Investment Management and holder of about 9% in Lear, has urged shareholders to oppose the buyout and has written letters to shareholder service groups arguing against it.
Pzena said Lear is worth $55 to $60 a share and told Reuters on Monday he estimated that investors representing at least 30% of shares would vote against the offer.
Stephens said Lear was "active and aggressive" during the 45-day period and intends to meet with the shareholder services groups as well to discuss the buyout offer.
The Icahn offer is subject to majority approval by shareholders. No vote has been scheduled, but a meeting could be scheduled for June depending on how quickly reviews are completed, Stephens said.
Analysts were uncertain whether Lear would attract much rival interest because of management support for the Icahn bid and the fact that few auto parts companies would have the financial strength and strategic focus to find it attractive.
Icahn also would be entitled to a breakup fee of up to $100 million if another offer is accepted.
Lear shares have traded above $36 since Icahn made his offer and remained above $36 on Tuesday. The stock was recently trading lower.