SOUTHFIELD, Mich.—Billionaire investor Carl Icahn on Jan. 4 raised his offer 75 cents a share to gain total control over Southfield-based Federal-Mogul Holdings Corp. as a previous offer deadline approached.
Icahn, through a subsidiary of his firm Icahn Enterprises L.P., offered $10 per share, up from a previous offer of $9.25 per share, to acquire the remaining shares of Federal-Mogul the firm does not own—about 18 percent. Icahn has waged a battle to take control of the supplier since September, but has not yet been able to sway shareholders.
In September, Icahn entered into a definitive agreement to acquire the remaining shares. Icahn then offered to pay $9.25 per share in an all-cash deal, which represents 86 percent higher than the supplier's share price of $4.98 on Feb. 26, when Icahn first proposed the buyout for $7 per share.
Icahn later extended the deadline to Dec. 15. When the supplier didn't reach an agreement, Icahn extended the offer again to Jan. 4, 2017.
In November, Icahn had only secured commitments for about 23 percent of the remaining shares ahead of the deadline, Icahn Enterprises said in a statement. The firm needed 51 percent majority of the remaining shares to take full control of the company.
It's unclear how many shares Icahn had secured in the latest bid.
The many extensions and raising of the offer are another setback for Icahn, who is reportedly battling Gabelli Asset Management Company Investors for the company. The New York Post reported in November that Gabelli, which owns 36 percent of the shares not owned by Icahn, is angling for a $13 per share bid for the company.
The bid to buy the remaining stake comes after Federal-Mogul scrapped its plan last January to split the company into two separate public entities. Company officers pointed to market conditions as the culprit behind its decision not to split its aftermarket parts division from its powertrain division.
In December 2015, Icahn won a $1.03 billion bidding war for auto parts retail chain Pep Boys. Experts believe Icahn plans to use the parts retailer as a mainline for Federal-Mogul parts but fear his vertical integration strategy will hurt the company over the long term.
Pep Boys' 800 stores, paired with Icahn's other aftermarket retailer, the 278-location Auto Plus, would make up the fifth-largest retail auto parts chain in the U.S. Even with Pep Boys' stores, Auto Plus would be significantly smaller than rivals Advance Auto Parts Inc., Autozone Inc. and O'Reilly Automotive Inc.
It's unclear whether Icahn taking full control of Federal-Mogul would expedite that process.
Federal-Mogul shares traded at $10.05, just above Icahn's offer, in Tuesday's morning trading.