Buyers of Dana Corp. stock apparently believe there will be a better offer for their company. They bid up the price well beyond the $15 per share offered by ArvinMeritor, Inc., yesterday.
Dana's stock gained $4.18 to close at $16.20 in New York Stock Exchange trading, on volume of 12.5 million shares, 14 times the normal volume. That was a gain of nearly 35 percent for the day. The stock at one point hit $17.19 a share before settling.
ArvinMeritor stock, as is customary with a buyer in a pending acquisition, was down. Its shares dropped 71 cents to close at $20.29 on volume of 1.2 million shares, about four times its average of 306,000 daily.
“Obviously everybody's interested in it,” said Michael Holly, manager of a suburban Toledo branch for Wachovia Securities. Dozens of his branch's clients sold Dana shares yesterday, several times the normal volume.
“Most of our clients in Dana buy and hold it,” Mr. Holly said. “But today there's more selling because of the profit made in the last 24 hours.”
While many investors have held Dana stock for a long time, some were buying locally yesterday, said Rita Mansour, Toledo regional manager for McDonald Financial Group. “We received a number of calls, and got some newer [Dana] investors,” Ms. Mansour said. The buyers believe that, because it was an unsolicited bid, the price could go higher, she added. “I haven't seen any sales today.”
Some large investors also were dumping Dana shares. Chapman Capital LLC, a private hedge fund in El Segundo, Calif., sold 100,000 Dana shares at $16.50, but held another 120,000 shares, said Robert Chapman, Jr., managing member.
Even if ArvinMeritor acquires enough stock to control Dana, Mr. Chapman said, “it could have to wait well over a year to replace Dana's board of directors. I hope for their sake they have the tenacity and patience to win the company over.”