Board Urges Lear Corp. Shareholders To Approve Icahn Buyout Offer

In a deal J.P. Morgan is calling "fair from a financial point of view," the board of Lear Corp. is recommending shareholders vote to approve Carl Icahn affiliate American Real Estate Partners' offer to buyout the remaining shares it doesn't own for $2.8 billion, or $36 a share. Including assumed debt, the acquisition will cost Icahn $5.3 billion; Icahn currently holds 16% of the shares outstanding. Lear closed up $0.14, or 0.4% to $36.80 in trading yesterday. In a rare interview with Crain's Detroit Business, Icahn partially explained his interest in Lear Corp. as follows: "If you look at my history, I've done this all of my life. You buy companies that are not in favor. You go against the emotion. You go against the tide. You don't go with the crowd, you go against it." Some major shareholders have come out against the deal including 10.1% owner Pzena Investment Management, who last month said Lear shares were worth closer to $60 with earnings likely to recover to $4 a share in the next few years. In other Lear Corp. news, the AP is reporting CEO Robert E. Rossiter received total compensation of $4 million last year while leading the company to a loss of $707.5 million during FY2006.

Sources: Press Release, Reuters, AP, MarketWatch
Commentary: Lear Corp. Officially Agrees to Icahn's Buyout Offer • Lear Corporation: Icahn Offers Buyout, Large Holder Pzena Opposes • Emboldened By Bankruptcy, Parts Makers Finally Telling Detroit 'No'
Stocks/ETFs to watch: Lear Corp. (LEA). Competitors: Johnson Controls (JCI), Delphi Corp. (DPHIQ.PK), Visteon Corporation (VC). ETFs: Rydex S&P MidCap 400 Pure Value ETF (RFV)
Related: Icahn Interview

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