ArvinMeritor vows to press to buy Dana
10/1/2003The top executive at auto parts giant ArvinMeritor Inc. told Wall Street analysts yesterday the company will keep pressing a $4.6 billion hostile takeover of Toledo-based Dana Corp., and that the recent death of Dana Chairman and Chief Executive Joseph Magliochetti doesn't alter anything.
``The bottom line is that things are not really changed,'' said Larry Yost, chairman and CEO of ArvinMeritor. The Troy, Mich., firm has been in pursuit of its larger auto parts rival since early July.
In a three-hour conference call with analysts, Mr. Yost said he remains shocked by the sudden death of Mr. Magliochetti, who died Sept. 22 of complications from an inflamed pancreas. He called the Dana leader a business associate and a friend.
``Some of you may consider that it is totally inappropriate to talk about the Dana thing under such circumstances, but on the other hand we were assured that there would be a number of you that would want us to talk about it,'' Mr. Yost said.
The ArvinMeritor chief executive said his company's cash offer of $15 a share, which expires tomorrow, is a significant offer, even though Dana's stock has traded higher than that since the takeover bid became public.
Mr. Yost insisted that financing the deal would not be a problem, although financing has not been arranged.
Consolidation is needed in the auto-part industry, he said, and a combined firm would have about $17 billion in annual sales, making it a top five player. A takeover of Dana would result in savings of $200 million, Mr. Yost said.
``We are picking our targets well, we're being very prudent, and that's one of the principal reasons that we are going after Dana,'' he said.
He emphasized ArvinMeritor's hope that Dana officials will discuss a possible takeover, but the Toledo firm has steadfastly refused to discuss it, contending that a merger would not make sense and that it would pose antitrust problems because of overlap in their products.
ArvinMeritor, which had a profit of $107 million last fiscal year and made $103 million in the first three quarters of its current fiscal year, yesterday cut its annual profit forecast to $2.20 to $2.40 a share, less than analysts' estimates averaging $2.67 a share, because of higher costs for new product launches, steel supply problems, and other expenses.
The news sent its stock tumbling 12 percent yesterday, down $2.46 a share to $17.81 on the New York Stock Exchange.