Lear and American Real Estate Partners, L.P. Announce a Merger Agreement Whereby Lear Will be Acquired for Approximately $5.3 Billion
SOUTHFIELD, Mich., Feb. 9: Lear Corporation (NYSE:LEA),a leading global supplier of automotive seating, electronics and electrical distribution systems and American Real Estate Partners, L.P. (NYSE:ACP), "AREP", a diversified holding company engaged in a variety of businesses and an affiliate of Carl C. Icahn, today announced that they have entered into an agreement for Lear to be acquired by AREP, in a transaction valued at approximately $5.3 billion, including the assumption of debt. Under the terms of the agreement, Lear shareholders would receive $36.00 per share in cash. Closing is expected to occur by the end of the second quarter of 2007.
Under the terms of the agreement, Lear may solicit alternative proposals from third parties for a period of 45 days from the execution of the agreement and intends to consider any such proposals with the assistance of its independent advisors. In addition, Lear may, at any time, subject to the terms of the merger agreement, respond to unsolicited proposals. If Lear accepts a superior proposal, a break-up fee would be payable to AREP.
"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," commented Bob Rossiter, Lear's chairman and chief executive officer. "We believe that the transaction price, which represents a multiple of about 9x our forecasted 2007 core operating earnings - excluding the Interior business, provides shareholders with significant value. Furthermore, we intend to solicit other offers to ensure that value is maximized for all of our shareholders," Rossiter added.
"Lear is an excellent company with a strong management team in place," said Carl Icahn. "We look forward to working with Lear's team to improve its long-term competitiveness, capitalize on growth opportunities globally and to build an even stronger and more valuable company in the future."
In connection with the transaction, J.P. Morgan Securities Inc. served as a financial advisor and Winston & Strawn, LLP served as legal counsel to a Special Committee of Lear's Board of Directors. Bank of America provided American Real Estate Partners, L.P. with debt financing commitments for this transaction.
The agreement is subject to the affirmative vote of the holders of a majority of the outstanding shares of Lear common stock, regulatory filings and approvals and other customary closing conditions. No assurances can be given that these conditions will be satisfied or that the proposed transaction will be consummated on the terms contemplated or at all. Upon the closing of the transaction, shares of Lear common stock will no longer be listed on the New York Stock Exchange or publicly-traded.
About Lear Corporation
Lear Corporation is one of the world's largest suppliers of automotive interior systems and components. Lear provides complete seat systems, electronic products and electrical distribution systems and other interior products. With annual net sales of $17.8 billion in 2006, Lear ranks #127 among the Fortune 500. Lear's world-class products are designed, engineered and manufactured by a diverse team of 104,000 employees at 275 facilities in 33 countries. Lear's headquarters are in Southfield, Michigan. Further information about Lear is available on the Internet at http://www.lear.com/.
AREP, a master limited partnership, is a diversified holding company engaged in a variety of businesses. AREP's businesses include gaming, real estate and textiles. To learn more about AREP, please visit the Internet at http://www.arep.com/.
Lear Non-GAAP Financial Information
This press release refers to "core operating earnings," which is defined as "income before interest, other expense, income taxes, restructuring costs and other special items", a non-GAAP financial measure.
Management believes this non-GAAP measure is useful to both management and investors in their analysis of the Company's financial position and results of operations. In particular, management believes that core operating earnings is a useful measure in assessing the Company's financial performance by excluding certain items that are not indicative of the Company's core operating earnings or that may obscure trends useful in evaluating the Company's continuing operating activities. Management also believes that this measure is useful to both management and investors in their analysis of the Company's results of operations and provides improved comparability between fiscal periods. Further, management uses this non-GAAP financial measure for planning and forecasting in future periods.
Core operating earnings should not be considered in isolation or as a substitute for pretax income (loss), net income (loss) or other income statement data prepared in accordance with GAAP or as a measure of profitability. Also, this non-GAAP financial measure, as determined and presented by the Company, may not be comparable to related or similarly titled measures reported by other companies.
Given the inherent uncertainty regarding special items and other factors in any future period, a reconciliation of forward-looking financial measures is not feasible. The magnitude of these items, however, may be significant.
First Call Analyst: Mel Stephens
Source: Lear Corporation
CONTACT: Mel Stephens of Lear Corporation, +1-248-447-1624; or Sue Zippo
of AREP, +1-212-702-4310
Web site: http://www.lear.com/
Company News On-Call: http://prnewswire.com/comp/518304.html