Shareholders of seat and electronics specialist Lear Corporation have voted against a merger with a private equity firm.
Following its annual meeting in Wilmington, Delaware, “an insufficient number of shares were voted in favour of the merger proposal with American Real Estate Partners”, Lear said.
As a result, the supplier’s earlier merger agreement with Arep will terminate according to previously-agreed terms and Lear will continue to operate as a stand-alone publicly-traded company.
“We respect the stockholder majority and intend to operate our business going forward with the same high level of intensity and commitment to customer satisfaction and stockholder value we have always had,” said Lear’s chairman and chief executive officer Bob Rossiter.
“At the time we entered into the merger agreement with AREP, we had a clear strategy and business plan for the future. We will continue to execute that plan.”
Rossiter added: “In the end, while there were many different viewpoints on the transaction, the decision came down to each individual owner’s investment perspective, outlook for the future and assessment of the risks. What we all can take away from this proposed transaction and ultimate vote is that both [AREP chairman Carl] Icahn and our present stockholders share a common positive view of Lear’s long-term prospects.”
The Detroit News noted that shareholders still gave the $US2.9bn bid the thumbs down despite months of lobbying, last-ditch appeals in recent weeks by Lear executives and board members, plus a hike in the per-share offer price to $37.25 from the initial $36.
The paper noted that the outcome didn’t surprise industry watchers but raised questions about the future of high-ranking Lear managers, who supported the bid.
It added that major investors and shareholder advocacy groups successfully resisted the sale, saying Lear was worth more than Icahn’s bid. Opponents were also said to have questioned the managers’ motives since top executives would have received big payouts if the deal were approved.
Analysts told the Detroit News that shareholders may now decide a change of management is needed.