|
Bidding war for LucasVarity?
|
 |
January 28, 1999: 10:24 a.m. ET
Federal-Mogul says it may top TRW's bid to buy LucasVarity for $6.6B
|
LONDON (CNNfn) - A bidding war for U.K. automotive and aerospace parts manufacturer LucasVarity could be in the works after Federal-Mogul said it may decide to make a formal bid to top TRW's agreed-upon offer.
The news sent LucasVarity shares up 10.5 pence or about 3.7 percent to 294.
U.S. auto parts maker TRW announced early Thursday it has agreed to buy LucasVarity for 4 billion pounds ($6.61 billion) in cash. TRW will pay 288 pence a share, or $47.35 for the American Depositary Receipts.
But Federal-Mogul says it may top the offer, urging LucasVarity shareholders to take no action and saying it wants private LucasVarity data that was made available to TRW.
Monday LucasVarity rebuffed a 280p a share offer from the U.S.'s Federal-Mogul (FMO) worth about $6.4 billion. Federal-Mogul's offer was a combination of cash and stock, which investors were unwilling to accept.
British investors have said they would be prepared to accept an all-cash offer.
LucasVarity shareholders are split roughly 50:50 between the U.S. and the U.K. British shareholders do not want to hold paper in Federal-Mogul, which is why the offer from TRW has their full backing.
Analyst Mustapha Omar at stockbrokers Collins Stewart had expected a new offer from Federal-Mogul.
"At 280p, TRW's offer has been very finely pitched, just 2.7 percent higher. They could have done better to have opened the bidding at 3 pounds."
Another analyst suggested a bidding war could go as high as 315 pence a share before a conclusive offer was reached.
"There is no way of knowing how much (Federal Mogul's) Dick Snell wants the company. If he wants it badly enough he will raise his bid," Omar added.
If the TRW deal goes through, the combined company will be a global supplier with nearly $19 billion in annual revenue. It will be a leader in integrated vehicle control systems and modules, including steering, suspension, and anti-lock brakes.
TRW shares rose 25 cents to 51 3/8 in early New York trading. Federal-Mogul rose 3/16 in London to 60 3/8.
|
|
|
|
|
|
LucasVarity
TRW
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
