Methode Electronics on Thursday recommended that shareholders reject a sweetened takeover bid from car parts maker DURA Automotive Systems Inc. and said it intends to proceed with a plan to combine the company’s two classes of stock, Reuters reported.
The news agency said Dura is seeking to buy a majority of Methode’s remaining Class B shares, which control the company while Chicago-based Methode has reached a deal with family trusts that own the bulk of those shares to eliminate them.
“Dura’s persistent attempt to undermine Methode’s conversion to a unified equity base in which shareholders have equal voting rights is both inappropriate and perplexing at a time when most companies are striving to improve their governance and investors and regulators are encouraging shareholder democracy,” Warren Batts, chairman of Methode’s special committee and a Class A shareholder, told Reuters.
The report said Dura is offering Methode’s Class B shareholders $US50 for each share, more than double what they would receive under Methode’s plan, and Dura also is offering Class A holders a two-part dividend totaling 61 cents as part of its buyout bid.
If Dura were to succeed with its offer, it would be able to take control of the company by acquiring about 1% of the company’s total outstanding shares, Methode said, according to Reuters.