United Technologies Corp. (UTC) has withdrawn its unsolicited $2.6 billion bid to acquire Diebold Inc., which had refused to take part in management discussions and delayed releasing its financial information.
In a public letter to Diebold Non-Executive Chairman John Lauer, UTC Chairman George Davis said it was unfortunate they were not able to negotiate a deal that would have created substantial value for shareholders of both companies.
“In light of your extended refusals of UTC’s requests for management discussions and due diligence, we are withdrawing our offer of Feb. 29 to purchase any and all Diebold common shares at $40 per share,” David wrote in the letter.
Hartford, Connecticut-based UTC took its offer for the electronic security integrator and manufacturer public on March 2 after Diebold officials declined to discuss a merger for more than two years. Diebold rejected the offer immediately.
UTC offered $40 a share, a 66-percent premium to Diebold’s share price on Feb. 29 of $24.12. Diebold’s board contended the price was too low. In late March, UTC disclosed a 3.5-percent stake in Diebold or roughly 2.28 million shares.
On Sept. 30, North Canton, Ohio-based Diebold finally caught up on its delinquent filings required by the Securities and Exchange Commission. The New York Stock Exchange had warned Diebold’s listing could be removed if it’s financial reporting continued to be delayed.
Lauer issued a public statement following UTC’s decision to drop its offer saying Diebold’s board of directors remain confident about the company’s future, although its stock remains far less than UTC had offered.
In the statement Lauer says “the company’s strategic initiatives to gain cost efficiencies and increase profitability” is expected to create “substantial shareholder value for its investors, despite current global financial market conditions.”
Diebold’s second-quarter 2008 profit rose 37 percent to $27.2 million, or 41 cents per share, versus a profit of $19.8 million, or 30 cents per share, for the second quarter of 2007.