Billionaire Carl Icahn's sweetened $3 billion buyout offer for auto parts maker Lear Corp. has gained little traction among top advisory firms or shareholders ahead of a scheduled vote next week.
Influential advisory firm Institutional Shareholder Services on Tuesday joined Pzena Investment Management LLC and the California State Teachers' Retirement System in opposing Icahn's new $37.25-per-share buyout offer for Lear.
All three had opposed an earlier $36-per-share offer from Icahn's American Real Estate Partners LP. Lear's board accepted both bids and recommends shareholder support.
Lear believes the deal was improved substantially by the new offer, despite a lack of competing bidders, and the vote remains scheduled for Monday, spokesman Mel Stephens said.
The original proposal was fair. We think the revised terms, including an increase in price, make it even more attractive, Stephens said.
Lear had delayed a shareholder vote on the earlier Icahn offer from June to this week to try to gain investor support, and then delayed the vote again to July 16 in negotiating the slightly higher terms of the new deal.
ISS said Lear and the automotive sector face significant challenges, but the auto parts maker's profile has not changed since the advisory firm's original analysis in mid June.
The implied premium over stand-alone value remains meager and in our opinion continues to not offer shareholders much of a control premium, ISS said in its report.
(Reporting by David Bailey)