Dana CEO's death not expected to halt bid
Sep 24, 2003 12:00 PM, from staff and wire reportsThe death of Joseph Magliochetti, Dana Corp chairman and chief executive officer, apparently will not derail the $2.2 billion hostile takeover bid by ArvinMeritor Inc.
Larry Yost, ArvinMeritor chairman and CEO, expressed sadness after Magliochetti, 61, died September 22 of complications from pancreatitis. "I'm still in shock. I knew Joe fairly well. I considered him a business associate and a friend. Our prayers are with his family at this point in time," Yost told Bloomberg.
He refused to say whether the death will affect his company's takeover bid for Toledo OH-based Dana, but he reiterated that his company will consider raising its bid and extending the offer deadline.
Dana, manufacturer of axles for light trucks, appointed William Carroll, a 32-year company veteran, as acting president and Glen Hiner as acting chairman.
Carroll, 59, president of Dana's biggest unit, had been acting chief operating officer since Magliochetti was hospitalized two weeks ago, the company said. Hiner, 69, is an independent director and former chairman and CEO of insulation maker Owens Corning, also based in Toledo.
Magliochetti led Dana's fight against ArvinMeritor's takeover. In rejecting the offer from the rival axle maker, he said antitrust concerns and divestitures that would result from a combination would make the deal pointless.
Dana's board has urged stockholders to reject the $15-a-share offer. ArvinMeritor disclosed it July 8 and extended it until October 2. The companies have sued each other over the offer.
"As soon as the Dana board is ready to sit down and talk with us, we'll find some more value and perhaps could raise the price," Yost told Bloomberg.
Dana probably will continue to rebuff ArvinMeritor, said David Cole, chairman of the Center for Automotive Research in Ann Arbor MI.
"One of the reasons they've resisted the takeover is that they believe they're poised to make a strong return to profitability," Cole said.
Dana became a takeover target after net losses of $182 million in 2002 and $298 million in 2001, and a 33% drop in its share price from the end of 2001 until July 8, the day ArvinMeritor made its offer public. Dana shares have since risen 32%. The company had revenue of $9.69 billion in 2002.