Dana Corp. has rejected an unsolicited bid by competitor ArvinMeritor Inc., calling the $15 per share ``inadequate,'' but ArvinMeritor maintains it is committed to the deal.
``There is virtually no rationale for accepting this offer, which represents inadequate value and a high level of risk for shareholders,'' Dana Chairman and Chief Executive Officer Joe Magliochetti said in a July 22 news release.
Troy, Mich.-based ArvinMeritor launched a bid July 8 for Toledo-based Dana in an offer worth $4.4 billion - half in cash, the rest in debt assumption.
Both companies produce metal automotive parts, but both also have plastics operations. Dana's Plumley Division molds gaskets and seals and Dana uses plastics in roof and door modules.
Dana officials waited 10 days to respond to the offer, but when they did, advised stockholders to hang onto their shares. The offer alone pushed the stock value from about $12 to more than $15. It closed July 22 at $15.28.
Dana executives also said the proposal would draw intense antitrust scrutiny and noted that ArvinMeritor has not secured adequate financing yet to back up its bid.
In addition, Magliochetti said Dana has ramped up a series of restructuring moves that will provide greater value in the long run for shareholders.
In response, ArvinMeritor executives noted the company will analyze ``whether a higher value is warranted.