Automotive parts maker Dana Corporation on Thursday sued competitor ArvinMeritor Inc., accusing it of using sensitive information to launch a hostile takeover, Associated Press (AP) reported.
The lawsuit asks a judge to stop ArvinMeritor from pursuing a takeover of Toledo-based Dana because confidential information was used in the bid, AP added.
AP noted that, two years ago, the two automotive supply companies considered a joint venture combining their aftermarket businesses. Last month, ArvinMeritor offered $US15 a share in cash for all outstanding shares of Dana, its larger competitor.
Dana’s board rejected the proposal, AP said, saying it was financially inadequate and a high-risk proposition. Dana’s lawsuit claims that ArvinMeritor used confidential information from the 2001 talks to pursue a hostile takeover of Dana.
According to Associated Press, Dana argues in court papers that some information it shared with ArvinMeritor – including breakdowns of Dana’s finances and future growth expectations – were to be used only to consider the joint venture.
Dana believes the information was used in the takeover bid, AP said, adding that the lawsuit accuses ArvinMeritor’s chairman and chief executive officer, Larry Yost, of telling analysts in a July 8 conference call about the confidential discussions between the rivals in 2001.
“Based in whole or in part on what they learned from Dana, confidentially in 2001, Yost and ArvinMeritor management assessed Dana as a merger partner and takeover target and then determined that ArvinMeritor should pursue its offer,” the lawsuit said, according to AP.
Associated Press noted that Dana sales totalled about $10 billion in 2002 and it employs more than 60,000 people worldwide while ArvinMeritor had $7 billion in revenue in 2002 and has 32,000 employees at 150 plants in 27 countries.