LEAR Corp, a money-losing maker of car seats, accepted a US$2.8 billion cash offer from billionaire Carl Icahn that some investors said is too low, Bloomberg News reported on Friday.
The US$36 a share proposal is US$4.07 below the price of Lear's shares on Thursday, when trading was halted because of pending news. Icahn already owns the largest stake at 16 percent in Southfield, Michigan-based Lear, whose shares had risen 16 percent through Thursday from the day before his February 5 offer.
"We are certainly going to vote against it," said Richard Pzena, whose New York-based investment firm is Lear's third- largest investor, with an 11 percent stake. "A big number of shareholders are going to lose money."
Icahn will have to overcome opposition from three of Lear's six largest shareholders. In addition to Pzena, Lear's No. 4 and No. 6 investors, Brandes Investment Partners LP and Classic Fund Management AG, said they intend to vote to reject the offer.
A sale would make Lear the largest auto-parts maker to be taken private, said David Andrea, a vice president of the Original Equipment Suppliers Association in Troy, Michigan. Icahn joins investors such as Wilbur Ross who are bidding for control of troubled auto-parts companies.
Ross agreed last year to take over Lear's auto-interiors unit, once the world's largest. Lear lost a combined US$2.1 billion in 2005 and 2006 as its biggest customers, General Motors Corp and Ford Motor Co, slashed North American production.
Icahn, 70, hasn't disclosed why he is interested in buying Lear. He built his reputation in the 1980s as a corporate raider, targeting big companies including Phillips Petroleum Co, Texaco Inc and Trans World Airlines Inc.
Lear was rated a "hold" or "sell" by 16 equity analysts before the agreement was announced on February 5, according to Bloomberg data.