ArvinMeritor, the $7-billion global supplier of integrated systems, modules and components to the motor vehicle industry, announced today that it intends to commence a tender offer to acquire all of the outstanding shares of Dana Corporation for $15.00 per share in cash.
ArvinMeritor’s offer represents a premium of 56% over Dana’s closing stock price on June 3, 2003, the last trading day before ArvinMeritor submitted its first proposal to Dana in writing, a premium of 39% over Dana’s average closing stock price for the last 30 trading days, and a premium of 25% over Dana’s closing stock price on July 7, 2003, the last trading day before today’s announcement.
The proposed transaction has a total equity value of approximately $2.2 billion assuming 148.6 million shares of Dana outstanding. In addition, Dana has net debt and minority interests of approximately $2.2 billion, accounting for Dana Credit Corporation on an equity basis, bringing the total enterprise value to approximately $4.4 billion. ArvinMeritor currently owns 1,085,300 shares of Dana’s common stock.
ArvinMeritor noted that the transaction would result in significant sales, operating and cost synergies. Based on publicly available information, ArvinMeritor expects to achieve annual cost synergies in the range of $200 million as a result of the transaction.
ArvinMeritor also filed a lawsuit today against Dana and its Board of Directors in the Circuit Court for the City of Buena Vista, VA, asserting, among other things, that Dana’s Board breached its fiduciary duties to Dana’s shareowners when it rejected ArvinMeritor’s proposals without meeting with ArvinMeritor.
For its part, Dana urged its shareholders to defer making a determination whether to accept or reject ArvinMeritor’s offer until ‘it had been advised of Dana’s position with respect to the offer’.