Lear Corporation has responded to a letter from investor Marcato Capital Management in which, according to media reports, the financier suggests the supplier be split in two.
While San Francisco-based Marcato was not available immediately for comment, Lear has reacted swiftly, outlining a series of initiatives it said shows why it delivers shareholder value.
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Lear cites returning more than US$2.1bn in the form of share repurchases and dividends while, since 2010, it maintains it has achieved a total shareholder return of 203%.
Despite the robust flag waving, Lear nonetheless is not ruling out any advice from Marcato, noting: “Lear’s board and management team are open to the views of its shareholders and will review the suggestions submitted by Marcato this morning.
“We will continue to prioritise delivering significant value to our shareholders and customers.
“Lear’s shareholders have benefited from the company’s successful execution of its balanced strategy: investing in the business, pursuing value enhancing acquisitions, maintaining a strong and flexible balance sheet and returning capital to shareholders.
“This strategy is delivering consistently improving financial results and driving superior returns for shareholders. 2014 was another excellent year for Lear as the company achieved its fifth consecutive year of higher sales and adjusted earnings per share and strong cash flow.”
Two years ago, Marcato, along with Oskie Capital Management, said: “We share the view expressed in the company’s press release of 7 February, 2013 that the company is undervalued and we see what we believe to be a serious discrepancy between Lear’s improved operating performance and business prospects and its current market valuation.”
Further details are expected later today (4 February).
