United Technologies owns 3.5% of Diebold, remains committed to $40-per-share offer

By Lisa Kerner

Charlotte, N.C., March 27 - United Technologies Corp. reported ownership of 2.28 million shares, or about 3.5%, of Diebold, Inc., making it the company's sixth-largest shareholder, according to a United Technologies news release.

On March 2, United Technologies proposed a $40-per-share cash offer for all outstanding shares of Diebold. It was reported that the offer price was a 66% premium to Diebold's trading price on Feb. 29.

As previously reported, Diebold plans to finance the share acquisitions with current cash balances and other available sources of funds.

United Technologies said that Diebold's board has refused to discuss the offer and has also refused United Technologies' request for due diligence, the release said.

"The New York Stock Exchange has notified Diebold that it is at risk of delisting due to management's failure to file timely financial statements," United Technologies vice president of finance Jim Geisler stated in the release. "This development underscores the need for Diebold's board to engage with United Technologies on our compelling cash offer."

Diebold said it is "working diligently" to complete its filings and expects its financial review to be completed by the end of the second quarter.

The company called United Technologies' claims of a potential NYSE delisting "highly misleading."

Diebold does not believe it faces any threat of delisting until at least Sept. 17, according to the company's statement.

Despite United Technologies' reported 3.5% stake in the company, Diebold continues to believe the investor's offer undervalues the company, according to a Diebold statement released on Thursday.

The offer also does not take into account current strategic initiatives and Diebold's previously disclosed $100 million cost-reduction program, Diebold said.

In February, Diebold chairman John N. Lauer turned down United Technologies' offer to discuss a possible business combination. Lauer also requested that Diebold refrain from further contact with United Technologies, according to Diebold.

United Technologies is a Hartford, Conn.-based provider of high technology products and services to the building and aerospace industries.

Diebold provides automated self-service transaction systems. The company is located in North Canton, Ohio.

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