DETROIT (AP) – Lear Corp.'s board is recommending that shareholders of the auto parts supplier vote in favor of a buyout offer valued at about $2.8 billion from a group affiliated with billionaire investor Carl Icahn, according to a federal filing Tuesday.
The company said in a proxy statement filed with the Securities and Exchange Commission that the board determined the offer is fair and in the best interests of the Southfield-based company and its stockholders. The board considered the recommendation of a special committee of independent directors.
Under the agreement proposed last month, Icahn-controlled American Real Estate Partners LP is paying $36 a share, and Lear said last month that amounts to about $2.8 billion. The buyers would also assume about $2.5 billion in debt.
Lear said in the SEC filing that J.P. Morgan Securities Inc. reviewed the offer and decided that the agreement was ''fair from a financial point of view to such holders of shares of our common stock.''
The filing also details the meetings leading up to the announcement of the offer last month. It said Bob Rossiter, Lear's chairman and CEO, met Jan. 16 with Icahn and others in New York, where the buyout idea was raised.
''Icahn suggested that the company might be able to take a longer-term focus, more aggressively pursue restructuring initiatives and be better positioned to withstand volatile industry conditions as a private company with a strong financial sponsor,'' the filing said.
Icahn owns about 16 percent of the company. The deal faces opposition from some shareholders, some of whom have filed lawsuits trying to block the agreement. Lear says the suits are without merit.
Under the terms of the agreement, Lear, whose products include seats and electronic systems, may solicit alternative proposals and has said it intended to consider such proposals. That deadline is the end of the day next Monday. Lear also may, at any time, respond to unsolicited proposals.
Lear had sales of $17.8 billion in 2006 and reported a wider fourth-quarter loss after taking charges to sell its interiors unit. The company has seen profit and sales shrink in recent periods after North American automakers sharply cut production, but its latest results beat Wall Street estimates.