Automotive parts maker Dana Corporation on Monday escalated its fight against rival ArvinMeritor Inc.’s $US2.2 billion hostile takeover bid, suing its rival’s financial adviser UBS AG for misappropriating confidential information, Reuters reported.
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The suit against the Swiss bank, which had once advised Dana, was the latest shot by the company that rejected ArvinMeritor’s July 8 offer as too low, the report noted.
According to Reuters, ArvinMeritor has already sued Dana for misleading investors when it justified its rejection of the all-cash bid from its smaller rival.
Dana’s federal lawsuit, filed in the Southern District of New York, said UBS, while working on a project for Dana in March 2002, had gathered “confidential information about Dana, its financial condition, its business plan and prospects, its competitive posture, trade secrets, and its potential liabilities,” Reuters said.
The news agency said that Dana did not say what the project was but a source familiar with the situation said it involved a joint venture which got stalled as Dana and the other unnamed party could not agree on working conditions with workers.
Responding to the lawsuit, a UBS spokesman told Reuters the bank’s relationship with ArvinMeritor predates its links with Dana.
“Dana acknowledged the potential for UBS to do business with competitors and its procedures for protecting confidentiality. We believe the lawsuit is without merit and intend to defend it vigorously,” he reportedly said.
According to Reuters, in its lawsuit Dana said it was seeking to end the advisory relationship between UBS and ArvinMeritor and the suit also said it was also claiming “compensatory and punitive damages” for the harm caused to Dana by the advisory firm’s “breach of contract and their clandestine betrayal of trust.”
In a brief statement cited by Reuters, ArvinMeritor said: “UBS has assured us that they have gone through the appropriate compliance procedures and that there is no issue.”
