Today, Carl Icahn increased his bid for Lear Corporation(NYSE:LEA) by $1.25 per share to $37.25, or $2.9 billion through his American Real Estate Partners LP. The roughly $100 million increase seemed to appease the board's lead independent director who professed his belief that accepting the deal was in the best interest of shareholders. This increase, however, doesn't appease the largest shareholder, Richard Pzena. In an interview, Pzena said, "We're voting against this...we're not looking for an extra dollar," according to Reuters. In the same interview, Pzena maintained his view that Lear is worth $55-$60 per share. Pzena was not the only unhappy person with Icahn's first offer, either. The California State Teachers Retirement System and Institutional Shareholder Services were both fervently against the $36 offer.

With his offer, the company's board accepted Icahn's $25 million breakup fee. Therefore, if the deal doesn't go through, Icahn will pocket $25 million. This also dissatisfied Pzena who said, "It is highly unusual and very coercive. It's saying to shareholders, 'If you don't do this, it will cost you."

Lear's prospects look very bright. Following a very strong downturn in the entire US-auto business, the company is recovering nicely. Analysts expect $2.94/share in earnings next year, versus just 9 cents per share in 2006, according to Yahoo! Finance. While Pzena's $55-60/share valuation seems rather high when looking at the stock's recent action, the stock's long term performance is familiar with such numbers, as displayed in the chart
below.