United Technologies Corp. (NYSE: UTX) has offered to acquire Diebold, Inc. (NYSE: DBD) for $40.00 per share in cash, which is a total enterprise value of approximately $3 billion. To top it off, this represents roughly a 66 percent premium to Friday's close of $24.12. The full release is here.
In this offer, United Technologies said that it has pursued Diebold for roughly two years. The company is also leaving room for negotiation on the table: "Additional value could be identified, and a higher price proposal for Diebold's shares could result. We are prepared to begin immediately and believe a definitive agreement can be completed within thirty days."
Interestingly enough, a February 19 letter from John Lauer, CEO and chairman of Diebold says that the company has considered the offer and turned it down. The letter also says, "In addition, we respectfully request that, from here forward, neither you nor any other representative of UTC contact any member of the Diebold Board."
One thing that should be noted is that Lauer is a fairly entrenched CEO, and he might not want to sell the company at any price. Ultimately, that won't be his decision. But for now it is.
This is also a 45 percent premium over the average price of the last 3 months. While it is a monster premium, the 52-week trading range is $23.07 to $54.50. Diebold shares are trading at $39.60 in pre-market trading, only a 1% discount to that $40.00 offer. It seems that the market is not only voting for the deal. It looks like they expect a higher price.
United Tech's odd saga and huge buyout premium for Diebold
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Reader Comments (Page 1 of 1)
3-11-2008 @ 8:14AM
Julian C Ross said...
It doesn't surprise me that the board is running scared. Diebold has a lot of managers and inept supervisors running scare ... it's the trickle-down effect of a mishap "leadership" that seems to operate mostly on a hit-or-miss bases.
IT WOULD BE ASININE NOT TO ACCEPT UNITED TECH'S OFFER. The whole idea of holding stock is to make money. Well, now is FINALLY a chance for stock holders to make some money off this "broke" company.