Dana rejects ArvinMeritor's offer

Dana Corp.'s board of directors has rejected ArvinMeritor Inc.'s hostile takeover attempt, calling ArvinMeritor's offer inadequate from a financial point of view to Dana's stockholders. "There is virtually no rationale for accepting this offer, which represents inadequate value and a high level of risk for shareholders," Dana chairman & CEO Joe Magliochetti said in a press release. ArvinMeritor Inc. said July 9 that it intended to acquire all of the outstanding shares of Dana for $15 per share in cash. The proposed transaction had a total equity value of approximately $2.2 billion. Arvin Meritor said that the $15 a share offer was 56% over Dana’s closing stock price on June 3 and 25% over the July 8 closing stock price. In addition, Dana cited the significant financing risks and serious antitrust concerns raised by the offer that could prevent its completion. The firm said Dana and ArvinMeritor are the only substantial North American producers of axles, driveshafts, and foundation brakes for medium- and heavy-duty trucks, with combined market shares ranging from 80 to 100%. ArvinMeritor said it is committed to the transaction even though Dana "refuses to negotiate" with them. "Our offer permits Dana’s shareowners to realize an attractive cash value for their shares today without bearing the risks of Dana’s long-term restructuring efforts," ArvinMeritor said in a press release.