From Detroit Free Press
SOUTHFIELD, MI — As the deadline closed for actively seeking offers, Lear Corp.’s second-largest shareholder filed a letter Monday with the U.S. Securities and Exchange Commission raising objections to the lone outside bid received so far for the company.
Lear’s Board of Directors urged shareholders last week to approve a $5.3-billion buyout led by billionaire Carl Icahn, whose group is the largest shareholder with 16 percent of Lear’s outstanding stock.
Lear is a Southfield, MI-based supplier of automotive seats, interior components and systems.
The Icahn offer would pay shareholders $36 a share. A 45-day window for the company to actively solicit other offers ended Monday night. No other bidders had been reported by the company as of late Monday.
But New York-based Pzena Investment Management, which owns 9 percent of Lear’s stock, filed a letter with the U.S. Securities and Exchange Commission saying $36 a share was far too low. Lear stock is worth between $55 and $60, the letter said.
"We plan to vote against the deal and have urged other shareholders to do the same," Pzena wrote.
Pzena also raised concerns about a conflict of interest by the company’s management, which could make millions of dollars if the deal goes through. Lear Chairman and Chief Executive Bob Rossiter could receive more than $20 million if a change of control takes place.
"We are concerned that management is acting in their own interests instead of the interests of shareholders," Pzena wrote in an analysis included with the letter.
Pzena sent copies of the letter to Institutional Shareholder Services, Proxy Governance Inc. and Glass, Lewis & Co., which advise major shareholders on proxy issues and are likely to file their own reports as a vote on the Lear offer nears.
Lear declined to comment on the letter. The company expects shareholders to receive proxies in June to vote on the deal.
Lear stock closed Monday at $36.62, down 1.3 percent. Lear shares traded for more than $40 apiece when Lear’s board first accepted Icahn’s offer.
Copyright (c) 2007, Detroit Free Press