The proposed transaction has a total equity value of approximately $2.2 billion assuming 148.6 million shares of Dana outstanding, ArvinMeritor said. In addition, Dana has net debt and minority interests of approximately $2.2 billion, accounting for Dana Credit Corp on an equity basis, bringing the total enterprise value to about $4.4 billion.
The transaction is anticipated to be significantly accretive to ArvinMeritor’s earnings per share in the first year after the transaction closes.
“We believe that to succeed in today’s increasingly global and competitive automotive supplier industry, we must take actions that will increase the opportunities available to our company in the future and enhance value for our shareowners, customers and employees,” said Larry Yost, ArvinMeritor chairman and chief executive officer.
“We would prefer to meet with the Dana board and its advisors to discuss our all-cash offer and negotiate a mutually acceptable transaction,” said Yost. “However, Dana has rejected our prior proposals and refused our requests to enter into discussions. Therefore, we believe it is necessary to take our offer directly to Dana’s shareowners.”
Yost said that a combined ArvinMeritor-Dana will have a more diversified product mix and a balanced customer base. He said the combined company will have the increased capability to accelerate growth, make strategic investments, and enlarge its portfolio of products and services.
ArvinMeritor said the offer will be conditioned upon, among other things, the acceptance by more than two-thirds of Dana’s shares, receipt of necessary regulatory approvals, and obtaining necessary financing.
In addition, ArvinMeritor also filed a lawsuit against Dana and its board of directors in the Circuit Court for the City of Buena Vista VA,. The suit asserted that Dana’s board breached its fiduciary duties to Dana’s shareowners when it rejected ArvinMeritor’s proposals without meeting with ArvinMeritor.
ArvinMeritor currently owns 1,085,300 shares of Dana’s common stock.
