Posts
Carl Icahn's offer of $36 a share in cash was accepted by shareholders.Another number of reasons could explain this sudden acceptance despite pleas from other major shareholders (eg Pzena) that the stock was still undervalued.The drastic cutbacks in the US automotive industry due to restructuring and laying off of thousands of workers by Ford and GM has ensured pessimism over automotive -related stocks and depressed such stock prices.Thus shareholders opted for a quick and easy way out, after suffering months of sluggish performance,by accepting Icahn's offer even if Lear was severely undervalued.
However,recent news suggest that GM(the largest automobile manufacturer in the world), is on the verge of turnaround due to its restructuring plans .Lear ,being a supplier of automotive parts,would enjoy a favorable position if and when GM rebounds.Such a situation could explain why Icahn is confident enough to buy out Lear,given that a return to strong profitability is on the horizon.
According to the Schedule 13D/A filed by Carl Icahn, Lear will begin a "go shop" period of 45 days to look for potential bidders who can provide better financial terms .Given that most "go shop" end in failures, Lear being bought out again is not likely.However, Lear will be an interesting stock to follow in the coming months.
Saturday, February 10, 2007
Subscribe to:
Post Comments (Atom)
1 comment:
Its been accepted by mgt, not shareholders. Shareholders will be voting their proxy and since stock price has consistently traded above $36, those who want out will sell in the open mkt. Hence, its unlikely Icahn will be able to steal the company from minorities.
Post a Comment