One of the biggest shareholders of the Lear Corp, a manufacturer of automotive seats, criticized the company's deal on Friday to sell itself for US$2.8 billion to the investor Carl Icahn.
The shareholder, Richard Pzena, who owns 11 percent of Lear through his firm, Pzena Investment Management, said he believed that the price was too low and that Lear did not need outside help to turn around its business.
Another shareholder, Evercore Asset, which calls itself a relatively small shareholder of Lear, said Friday that it was going to vote against Icahn's bid.
Evercore said the offer price of US$36 a share did not reflect the value of Lear.
The deal -- the latest in a wave of major investments in the troubled auto parts industry -- is worth US$5.3 billion, including US$2.5 billion in debt that will be assumed by American Real Estate Partners, the investment firm controlled by Icahn. Icahn already owns nearly 16 percent of Lear's 76.3 million outstanding shares, which would be valued at US$36 each.
That is US$3.39 less than the closing price for Lear's stock on Friday; shares fell 1.7 percent after the deal was announced.
Lear, based in Southfield, Michigan, expects the deal to close by the end of the second quarter. But the company said it would also consider any other offers submitted within 45 days.
Pzena sent a letter critical of the proposed buyout to Lear's independent directors this week.
Pzena said in an interview on Friday that Lear was in the middle of a turnaround.
He said that Lear shares could be worth US$60 each within a few years, which would make his stake in the company worth US$201 million more than it is valued under Icahn's offer.
"I don't understand why they felt like they had to sell the company at all," Pzena said. "I hope that the shareholders send a message to the board that they can't be doing these kinds of things."
In a statement, the chairman and chief executive of Lear, Robert Rossiter, said that shareholders should be pleased with the buyout terms.
"Following a very thorough review of the proposed transaction, our board unanimously concluded that the AREP offer was in the best interests of Lear's shareholders," Rossiter said.
"We believe that the transaction price, which represents a multiple of about nine times our forecasted 2007 core operating earnings -- excluding the interior business -- provides shareholders with significant value," he said.
Lear, which lost more than US$2 billion in the last two years, agreed in the fall to sell its automotive interiors division to another billionaire investor specializing in struggling companies, Wilbur Ross.
An analyst with Lehman Brothers in New York, Brian Johnson, said he expected the buyout of Lear to be supported by most shareholders, particularly those who paid less than US$30 a share for their interest in the company.
Icahn bought nearly 8.7 million Lear shares in November for US$23 each, regulatory filings show.
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