Lear shareholder Pzena plans to vote against new merger agreement

By Jennifer Lanning Drey

Portland, Ore., July 9 - Lear Corp. shareholder Pzena Investment Management LLC will vote against an amended merger agreement between Lear and American Real Estate Partners, LP, under which American Real Estate Partners agreed to increase its offer price for Lear to $37.25 per share, Richard Pzena, head of Pzena Investment, told Prospect News on Monday.

"This increase in the price is just not sufficient," Pzena said.

Pzena Investment, which beneficially owns 6.775 million shares, or an 8.84% stake in Lear, believes the company is worth between $55 and $60 per share, he said.

American Real Estate Partners, a Carl C. Icahn affiliate, increased its original offer of $36 per share on Monday after the offer was met with opposition from some of Lear's shareholders.

Pzena said he does not believe the extra $1.25 will sway shareholders who were planning to vote against the previous offer.

"I think most who would vote in favor of this agreement think the stock would trade down if the deal breaks," Pzena said, adding he does not believe that to be a risk.

A representative for Lear did not respond to a request for comment. However, company officials recommended that shareholders vote in favor of the merger agreement, in a Monday letter filed with the Securities and Exchange Commission.

Carl C. Icahn and affiliated companies beneficially own 11.995 million shares, or a 15.65% stake, in Lear.

Lear's other major shareholders include Merrill Lynch & Co., Inc. with 6.432 million shares, or an 8.39% stake; Vanguard Windsor Funds with 6.170 million shares, or an 8.05% stake; and Classic Fund Management AG with 3.617 million shares, or a 5.38% stake, according to various filings made with the SEC.

Lear is an automotive interior systems and components supplier located in Southfield, Mich.

New York-based American Real Estate Partners is a diversified holding company.

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