Dana rejects ArvinMeritor's takeover bid

TOLEDO, Ohio (July 23)—Dana Corp. rejected an offer from competitor ArvinMeritor Inc. to purchase the company for $15 per share, in a release issued after the close of business July 22. Dana's board said the offer was inadequate, citing the financial opinions of its financial advisers, Credit Suisse First Boston L.L.C. and Deutsche Bank Securities Inc. The company also pointed to progress it has made through its restructuring efforts, saying it believes that strategy is a better way to enhance shareholder value. Dana's board said antitrust issues in medium- and heavy-duty truck axles, foundation brakes and driveshafts are likely to attract "intensive scrutiny" from regulatory authorities, which may result in litigation to block the offer. To complete the deal, ArvinMeritor would push its debt-to-capital ratio to 88 percent, among the highest in the automotive supplier industry, Dana said. In a research report, John A. Casesa of Merrill Lynch & Co. said he believes ArvinMeritor is likely to raise its bid.