HARTFORD, Conn. — United Technologies Corp. (UTC) has withdrawn its $2.63 billion bid for Diebold Inc., complaining that management of the electronic security integrator and manufacturer had rebuffed its negotiation efforts.
In a letter to Diebold, UTC Chairman George David expressed frustration over Diebold’s “extended refusals of UTC’s requests for management discussions and due diligence.” UTC took its offer public on March 2 after Diebold officials declined to discuss a merger for more than two years. UTC offered $40 a share, a 66-percent premium to Diebold’s share price on Feb. 29 of $24.12. Diebold rejected the offer immediately.
“We had hoped we could negotiate a transaction that would have created substantial value for both your and our shareholders. It’s unfortunate this won’t happen,” David said in the letter addressed to Diebold Chairman John Lauer.
Lauer issued a statement that talked about Diebold’s future, although it didn’t specifically refer to UTC’s decision. He said Diebold is confident that its shareholders will eventually benefit from “strategic initiatives to gain cost efficiencies and increase profitability.” The company is trying to achieve a three-year, $100 million reduction in costs by the end of this year.
The bid for Diebold — which could have fit well into UTC’s fire segment — was the final acquisition attempt by David, who was CEO at UTC until he retired in April. In the past few years the company has bought Lenel Systems Int’l Inc., a security systems and software developer; Chubb, a fire safety and security services business; and Kidde, a British fire and safety company.