March 02, 2008

"United Technologies Makes Bid for Diebold"

"The United Technologies Corporation made public on Sunday an unsolicited $3-billion bid for Diebold, one of the largest makers of automated teller machines and voting machines.

United Technologies, which first approached Diebold two years ago, initially made the $3 billion offer in private on Friday. The bid is $40 a share in cash, or a 66 percent premium over Diebold’s Friday closing price of $24.12, United Technologies said.

Several unsolicited or hostile offers have been made this year despite an overall slowdown in deal-making activity. Among companies making unfriendly advances are Microsoft, which is pursuing the wounded Internet giant Yahoo, and Electronic Arts, which made a bid for Take-Two Interactive, the maker of the Grand Theft Auto series of video games.

In Diebold, United Technologies sees a chance to expand its electronic security business with one of the field’s largest players. Last year, United Technologies bought Initial Electronic Security Systems for about $1.2 billion.

“This transaction creates significant and immediate value for Diebold shareholders with no operational risk, while creating long-term value for U.T.C. shareholders,” George David, United Technologies’ chairman and chief executive, said in a statement Sunday.

James Geisler, United Technologies’ vice president of finance and the head of its mergers and acquisitions team, said in an interview Sunday that the company contacted Diebold about a possible deal two years ago, but was rebuffed.

On Feb. 19, Mr. David sent Diebold’s board a letter proposing deal talks. Two days later, Diebold’s chairman, John N. Lauer, responded that the company’s board had rejected any possible tie-up, saying none was in its best interests, and requested that United Technologies refrain from contacting any of its directors.

Mr. Geisler declined to say whether United Technologies would press the bid if Diebold formally declined it, saying only his company “knew what its options are.”

Founded in 1859, Diebold grew as a financial systems security provider. But it was thrust into a harsh public spotlight in the 2004 election, as the company was criticized for its electronic voting machines in Ohio and elsewhere."

Posted by Randy Riddle at March 2, 2008 03:39 PM