Auto Service World
News   October 3, 2003   by Auto Service World

Dana Calls ArvinMeritor Offer Extension Still "Financially Inadequate"

Dana Corporation says that the extension of the takeover offer by ArvinMeritor changes nothing, saying that the offer is still inadquate and "high risk."
Dana issued an official statement in response to the announcement by ArvinMeritor, Inc. that it will extend for a second time the expiration of its tender offer for all outstanding Dana shares.
"On July 22, Dana’s board of directors rejected ArvinMeritor’s offer after a thorough review and consultation with its legal and financial advisors," said Bill Carroll, acting president and chief operating officer. "The board concluded at that time that the offer was a financially inadequate, high-risk proposal that was not in the best interests of Dana or its shareholders, and nothing has changed with respect to the offer since that time. Dana’s restructuring and transformation efforts are producing results and the Board believes that the company’s ongoing strategy is a better way to enhance value for our shareholders."
Dana vice president and chief financial officer Bob Richter noted, "It is significant that in the nearly three months since ArvinMeritor originally made this unsolicited offer, it has not yet announced that it has the necessary financing for the transaction. In addition, the major antitrust challenges that Dana’s board noted from the start were underscored by the ‘second request’ issued by the FTC in early September. Also, ArvinMeritor is now talking about significant potential divestitures of the combined company’s commercial vehicle axle assets and other businesses. Significant divestitures of that nature would appear to limit opportunities for synergies and change the strategic premise for the transaction that ArvinMeritor originally proposed to shareholders. For all of these reasons, investors understandably continue to question whether this deal makes sense."

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