Icahn May Drop Federal-Mogul Buyout Bid
Investor Carl Icahn, whose Icahn Enterprises owns 82% of Federal-Mogul Holdings Corp., says he may drop his offer to buy the company’s remaining shares.
In February Icahn offered $7 per share for the 18% stake, upped the bid to $8 in June and raised it to $9.25 in September. The latest offer represents an 86% premium over the original offer but was 68 cents below the stock’s closing price on Tuesday.
Federal-Mogul’s board endorses the bid. But this week Icahn extended the offer to Dec. 15 because of tepid response among shareholders.
Now, he tells a Reuters investment conference in New York City, “I’m trying to figure out whether to pull [the offer] or not.” His comment prompted the share price to drop 5% to $9.46.
Analysts believe Icahn intends to integrate Federal-Mogul’s aftermarket brands, such as Champion spark plugs and Wagner brakes, with the Pep Boys retail chain he bought in December for $1 billion.
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