Icahn Agrees to Buy Out Federal-Mogul
Investor Carl Icahn is offering $281 million to buy the 18% of Federal-Mogul Corp. he doesn’t already own. The deal has been unanimously approved by the board of the parts supplier.
Icahn Enterprises LP offered to buy the stake in February at $7 per share when the company’s stock was at about $5. He upped the bid to $8 in June. The new offer is $9.25. Assuming the buyout occurs, Federal-Mogul will become a privately held subsidiary of Icahn Enterprises and no longer be listed on the NASDAQ exchange.
Analysts opine that Icahn wants to integrate Federal-Mogul’s aftermarket brands, such as Champion sparkplugs and Wagner brake parts, with the Pep Boys retail chain he acquired for $1 billion last December.
Federal-Mogul had planned to split into two publicly traded companies, one for powertrain parts sold to carmakers and one for replacement parts for the aftermarket industry. The company soon scrapped that plan and retained the two businesses as independent divisions.
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