ChooseLiberty
03-03-2008, 04:07 AM
Guess what? The military industrial complex is trying to buy the voting machines and cut out the middle man.
United Technologies Offers
$2.63 Billion for Diebold
By MATTHEW KARNITSCHNIG and J. LYNN LUNSFORD
March 3, 2008 wsj
United Technologies Corp. made an unsolicited $2.63 billion cash offer to acquire all of Diebold Inc., a maker of automatic teller machines, security systems and other computer hardware that United Technologies has coveted.
The $40-a-share bid, made on Friday, represents a 66% premium to Diebold's Friday closing share price of $24.12. It is about 27% below Diebold's 52-week high, hit intraday in July, of $54.50.
Diebold couldn't be reached for comment.
The move is the latest by UTC Chief Executive George David to expand the company's fledgling fire-and-security business through acquisitions. United Technologies acquired Chubb PLC of the United Kingdom and stood it up as a separate business alongside much larger UTC units such as Otis elevator, Carrier air-conditioning and Pratt & Whitney jet engines.
UTC's approach is the latest in a string of recent unsolicited offers, including Microsoft Corp.'s pursuit of Yahoo Inc., that have come as corporate buyers take advantage of depressed equity values in some sectors to attack weakened targets.
United Technologies made its offer public after Diebold's board rejected a series of recent overtures from the industrial conglomerate and its advisers.
In a Feb. 19 letter to Diebold Chairman John N. Lauer, Mr. David said his company was prepared to pay a "significant premium" for Diebold. "We believe UTC's resources and presence in markets globally would be significant assets to Diebold in expanding its business world-wide and increasing its margins and profitability," Mr. David wrote.
But Mr. Lauer and Diebold's board were unconvinced. In a letter dated Feb. 21, Mr. Lauer said the board had determined that UTC's approach was "not in the best interests" of Diebold and its shareholders. As if to underline the directors' resolve, Mr. Lauer closed his letter to Mr. David by requesting that "neither you nor any other representative of UTC contact any member of the Diebold Board." The rejection was made before UTC's Friday offer, however.
Jim Geisler, United Technologies' vice president for finance, said in an interview that officials at the Hartford, Conn., aerospace and building-service company have tried for two years to hold discussions with Diebold but were repeatedly rebuffed. "Obviously, we believe this is something their shareholders should know about," he said.
Although UTC's offer is well below Diebold's 52-week high, Mr. Geisler said United Technologies believes its cash offer of $40 a share is "compelling."
In a statement, Mr. David said he believed the transaction would create "significant and immediate value for Diebold shareholders with no operational risk, while creating long-term value for UTC shareholders."
Mr. David has sought to beef up the fire-and-security unit's size by adding incremental acquisitions. One of the acquisitions, for British fire- and safety-equipment company Kidde PLC in 2004, also turned nasty when Kidde rejected Mr. David's overtures. United Technologies ultimately won out, paying $3.1 billion for the company.
Last year, UTC's fire-and-security unit generated $5.8 billion in revenue, still far less than the company would like to see from that unit. "I like $10 billion businesses, and fire and security can easily be a $10 billion business," said UTC President and Chief Operating Officer Louis Chênevert during a recent speech.
United Technologies officials said Diebold would fit nicely into the company's business model, which relies heavily on profitable aftermarket sales and maintenance, particularly in businesses such as Otis elevator and its new fire-and-security unit.
The acquisition of Diebold would thrust United Technologies into some new lines of business, such as automated teller machines and voting machines. Mr. Geisler played down the significance of a company that also does defense contracting and sells voting machines, noting that those machines represent about 2% of Diebold's revenue. About 25% of Diebold's revenue last year came from its security products.
Mr. Geisler said Friday's letter was sent by fax and that officials there had also tried to reach Diebold's CEO and board members over the weekend. "We are optimistic that after this, we can sit down and quickly move toward a merger," he said.
The company said it would finance the deal from cash reserves and other readily available funds.
United Technologies Offers
$2.63 Billion for Diebold
By MATTHEW KARNITSCHNIG and J. LYNN LUNSFORD
March 3, 2008 wsj
United Technologies Corp. made an unsolicited $2.63 billion cash offer to acquire all of Diebold Inc., a maker of automatic teller machines, security systems and other computer hardware that United Technologies has coveted.
The $40-a-share bid, made on Friday, represents a 66% premium to Diebold's Friday closing share price of $24.12. It is about 27% below Diebold's 52-week high, hit intraday in July, of $54.50.
Diebold couldn't be reached for comment.
The move is the latest by UTC Chief Executive George David to expand the company's fledgling fire-and-security business through acquisitions. United Technologies acquired Chubb PLC of the United Kingdom and stood it up as a separate business alongside much larger UTC units such as Otis elevator, Carrier air-conditioning and Pratt & Whitney jet engines.
UTC's approach is the latest in a string of recent unsolicited offers, including Microsoft Corp.'s pursuit of Yahoo Inc., that have come as corporate buyers take advantage of depressed equity values in some sectors to attack weakened targets.
United Technologies made its offer public after Diebold's board rejected a series of recent overtures from the industrial conglomerate and its advisers.
In a Feb. 19 letter to Diebold Chairman John N. Lauer, Mr. David said his company was prepared to pay a "significant premium" for Diebold. "We believe UTC's resources and presence in markets globally would be significant assets to Diebold in expanding its business world-wide and increasing its margins and profitability," Mr. David wrote.
But Mr. Lauer and Diebold's board were unconvinced. In a letter dated Feb. 21, Mr. Lauer said the board had determined that UTC's approach was "not in the best interests" of Diebold and its shareholders. As if to underline the directors' resolve, Mr. Lauer closed his letter to Mr. David by requesting that "neither you nor any other representative of UTC contact any member of the Diebold Board." The rejection was made before UTC's Friday offer, however.
Jim Geisler, United Technologies' vice president for finance, said in an interview that officials at the Hartford, Conn., aerospace and building-service company have tried for two years to hold discussions with Diebold but were repeatedly rebuffed. "Obviously, we believe this is something their shareholders should know about," he said.
Although UTC's offer is well below Diebold's 52-week high, Mr. Geisler said United Technologies believes its cash offer of $40 a share is "compelling."
In a statement, Mr. David said he believed the transaction would create "significant and immediate value for Diebold shareholders with no operational risk, while creating long-term value for UTC shareholders."
Mr. David has sought to beef up the fire-and-security unit's size by adding incremental acquisitions. One of the acquisitions, for British fire- and safety-equipment company Kidde PLC in 2004, also turned nasty when Kidde rejected Mr. David's overtures. United Technologies ultimately won out, paying $3.1 billion for the company.
Last year, UTC's fire-and-security unit generated $5.8 billion in revenue, still far less than the company would like to see from that unit. "I like $10 billion businesses, and fire and security can easily be a $10 billion business," said UTC President and Chief Operating Officer Louis Chênevert during a recent speech.
United Technologies officials said Diebold would fit nicely into the company's business model, which relies heavily on profitable aftermarket sales and maintenance, particularly in businesses such as Otis elevator and its new fire-and-security unit.
The acquisition of Diebold would thrust United Technologies into some new lines of business, such as automated teller machines and voting machines. Mr. Geisler played down the significance of a company that also does defense contracting and sells voting machines, noting that those machines represent about 2% of Diebold's revenue. About 25% of Diebold's revenue last year came from its security products.
Mr. Geisler said Friday's letter was sent by fax and that officials there had also tried to reach Diebold's CEO and board members over the weekend. "We are optimistic that after this, we can sit down and quickly move toward a merger," he said.
The company said it would finance the deal from cash reserves and other readily available funds.