US car components group TRW set the clock ticking on its £4bn bid for LucasVarity at the weekend, posting details of the deal to the company’s shareholders.
TRW’s bid is a 288p-a-share all-cash offer. There was speculation that Federal-Mogul may return with an improved bid, after LucasVarity last month rejected its 50-50 cash and shares offer, which valued the group at 280p a share.
A TRW source was unconcerned about prospects of a higher bid from Federal-Mogul. ‘Our position is clear. We have a cash bid on the table and there is nothing higher around,’ he said.
TRW said if shareholders accept the offer, it will merge to become a global leader in vehicle safety systems. These include brakes, steering, suspension, occupant restraints and electronics.
Federal-Mogul unveiled fourth-quarter profits almost three times higher than in the same period a year ago. A host of acquisitions, including T&N in the UK, boosted profits from £7.5m to £22m.
Analysts were divided on a possible counter-bid. The high costs involved, including the expected £17m pay-off for LucasVarity chief executive Victor Rice, are likely to count against such a move.
TRW said that if its bid succeeded, jobs would be lost at both companies. ‘There may be some short-term job losses to eliminate duplication, but in the longer-term there will be a great deal of job creation,’ a spokesman said.
Many of LucasVarity’s 51,000 employees are in the UK. Cuts would be mainly in administration.