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 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.
About AREP
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.
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
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Related links:
http://www.lear.com
http://www.arep.com
http://www.prnewswire.com/comp/518304.html /
CONTACT:
Mel Stephens of Lear Corporation,
+1-248-447-1624; or Sue Zippo of AREP, +1-212-702-4310
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