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Published: Wednesday, 9/26/2007

Hedge fund details unsolicited bid to finance Dana bankruptcy exit

Hedge fund Appaloosa Management LP's bid for financing Dana Corp.'s emergence from bankruptcy said its offer is "substantially identical" to a prior proposal.

The company, whose offer was detailed yesterday in a U.S. Securities and Exchange Commission filing, said its help to the Toledo automotive parts firm could be scuttled by the strike against General Motors Corp.

Its unsolicited offer, which seeks to displace a deal Dana has with Centerbridge Capital Partners LP, includes an equity investment of up to $750 million, a $1.5 billion credit facility, and issuing unsecured notes.

The new filing said the rival offer could be conditioned on the absence of a strike at any U.S. automaker.

"Appaloosa proposes to include an additional closing condition to the effect that there shall not have occurred any material strike or labor stoppage or slowdown at the company, General Motors, Chrysler, Ford Motor Co., or any of their respective subsidiaries," the hedge fund said in the filing.

Dana is among parts suppliers likely to be hurt by a United Auto Workers national strike begun Monday against GM over lack of progress on a new national contract. GM last year generated about 10 percent of Dana's revenues.

The UAW also is in contract talks with Ford and Chrysler LLC.

A Dana spokesman referred questions to Appaloosa. Appaloosa officials declined comment.

A New York bankruptcy judge in July approved Centerbridge's $750 million investment plan in Dana, which would finance Dana's plan to emerge from Chapter 11 protection.

Appaloosa criticized that plan as inadequate. Its plan carries no break-up fee, in contrast to a $22.5 million break-up penalty Centerbridge has.

Appaloosa is run by billionaire investor David Tepper.

Hearings on Dana's bankruptcy-exit plan are scheduled to begin next month. Its plan is subject to approval of the creditors and a bankruptcy judge.

The firm filed for bankruptcy protection in March, 2006.

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