Lear Shareholders Shoot Down Icahn's Bid to Buy

From Detroit Free Press

WILMINGTON, DE — Lear Corp. shareholders rejected a bid to sell the Southfield, MI-based automotive seat maker to billionaire financier Carl Icahn.

The news means Lear will stay a public company, culminating a five-month battle in which three investor proxy firms suggested that shareholders reject the deal.

The company didn’t disclose the percentage of share that voted against the offer — originally $36 per share, later raised to $37.25 per share — which would have bought out shareholders for $2.9 billion and taken on $2.5 billion in debt.

Lear Chief Executive Officer Robert Rossiter said Lear is prepared to continue operating as a public company and focus on making up for eroding market share of U.S. automakers with new business in Asia.

"We think that realistically there are still some bumps in the road," Rossiter told reporters after the shareholders meeting.

"We respect the shareholders vote," said Vincent Intrieri, senior managing director at Icahn Partners and Icahn’s appointee to Lear’s board. "We think we made a very fair offer."

The rejection triggers a termination package that gives Icahn $12.5 million in cash, an estimated $12.5 million in stock and the right to hold as much as 27 percent of the company’s shares. Icahn had owned nearly 16 percent of Lear’s stock as of yesterday.

Intrieri declined to say what Icahn’s group would do next.

Shareholders who have campaigned against the deal have said that both prices were too low and that the sale of Lear demands a price more like $50 to $60 per share. Three investor advisory firms have recommended that shareholders reject both offers. But Lear’s management has backed both deals saying that it needs to go private to escape the pressures of Wall Street’s quarterly expectations, as it tries to complete a turnaround in a turbulent U.S. auto industry, where Lear’s largest customers — General Motors Corp. and Ford Motor Co. — are losing market share.