Icahn Raises Lear Bid to $2.9B

Lear Corp.'s Board of Directors approved an amendment to the merger agreement with Carl Icahn's American Real Estate Partners [AREP] for a revised bid of $37.25/share (+3.5%) in cash, up from $36.00 ($2.75b). The Board "strongly encourages" a vote in favor of amended proposal. Lear's annual shareholder meeting scheduled for July 12 has been rescheduled to the 16th. AREP is entitled to receive $12.5m in cash and 335,570 shares of Lear if it doesn't receive majority approval. "The Lear Board concluded unanimously that the original merger agreement with AREP was fair and in the best interests of Lear's stockholders. The increased price makes the transaction even more attractive," said Larry W. McCurdy, Lear's lead independent director. However, AREP's bid still faces opposition from Lear's second largest shareholder, Pzena Investment Management LLC (8.6% stake vs. Icahn's 16%) and various advisory firms. Richard Pzena, chief of Pzena commented, "It's nice that we get an extra dollar, but it's not enough for us to vote for it, and I don't think it will be enough to sway any of the long-term players."

Sources: Press release, Bloomberg, Wall Street Journal
Commentary: ACP: The Icahn Premium is Overdone - Barron's • Board Urges Lear Corp. Shareholders To Approve Icahn Buyout Offer
Stocks/ETFs to watch: Lear Corp. (LEA), American Real Estate Partners LP (ACP). Competitors: Johnson Controls (JCI), Delphi Corp. (DPHIQ.PK), Visteon Corporation (VC)

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