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 /PRNewswire-FirstCall/ -- 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
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
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.
Lear Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding anticipated financial results and
liquidity. Actual results may differ materially from anticipated
results as a result of certain risks and uncertainties, including but
not limited to, general economic conditions in the markets in which the
Company operates, including changes in interest rates or currency
exchange rates, the financial condition of the Company's customers or
suppliers, fluctuations in the production of vehicles for which the
Company is a supplier, disruptions in the relationships with the
Company's suppliers, labor disputes involving the Company or its
significant customers or suppliers or that otherwise affect the Company,
the Company's ability to achieve cost reductions that offset or exceed
customer-mandated selling price reductions, the outcome of customer
productivity negotiations, the impact and timing of program launch
costs, the costs and timing of facility closures, business realignment
or similar actions, increases in the Company's warranty or product
liability costs, risks associated with conducting business in foreign
countries, competitive conditions impacting the Company's key customers
and suppliers, raw material costs and availability, the Company's
ability to mitigate the significant impact of increases in raw material,
energy and commodity costs, the outcome of legal or regulatory
proceedings to which the Company is or may become a party, unanticipated
changes in cash flow, including the Company's ability to align its
vendor payment terms with those of its customers, the finalization of
the Company's restructuring strategy and other risks described from time
to time in the Company's Securities and Exchange Commission filings.
The forward-looking statements in this news release are made as of
the date hereof, and the Company does not assume any obligation to
update, amend or clarify them to reflect events, new information or
circumstances occurring after the date hereof.
AREP Forward-Looking Statements
This news release contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995, many of which are beyond our ability to control or predict.
Forward-looking statements may be identified by words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimates,"
"will," or words of similar meaning and include, but are not limited to,
statements about the expected future business and financial performance
of AREP and its subsidiaries. Among these risks and uncertainties are
risks related to our gaming and associated hotel, restaurant and
entertainment operations, including the effects of regulation,
substantial competition, rising operating costs and economic downturns;
risks related to our real estate activities, including the extent of any
tenant bankruptcies and insolvencies, our ability to maintain tenant
occupancy at current levels, our ability to obtain, at reasonable costs,
adequate insurance coverage and competition for investment properties;
risks related to our home fashion operations, including changes in the
availability and price of raw materials, changes in customer preferences
and changes in transportation costs and delivery times and other risks
and uncertainties detailed from time to time in our filings with the
SEC. We undertake no obligation to publicly update or review any
forward-looking information, whether as a result of new information,
future developments or otherwise.
SOURCE: Lear Corporation
CONTACT: Mel Stephens of Lear Corporation, +1-248-447-1624; or Sue
of AREP, +1-212-702-4310
Web site: http://www.lear.com/
Company News On-Call: http://www.prnewswire.com/comp/518304.html
Posted on 2/9/2007