Visteon rejects Johnson Controls' $1.25 billion offer for businesses

By Caroline Salls

Pittsburgh, June 1 - Visteon Corp. has rejected an unsolicited $1.25 billion proposal from Johnson Controls, Inc. to purchase assets related to Visteon's interiors and electronics businesses, according to a company news release.

In a letter to Johnson Controls, Visteon said its board of directors unanimously concluded its stakeholders, customers and employees "are best served by moving forward with our previously announced plan of reorganization to emerge from bankruptcy as a strong, independent, stand-alone company."

"Without risk-adjusting your proposal, our careful analysis demonstrates that your acquisition of selected assets, while excluding certain liabilities, would accelerate other costs and would not significantly enhance recoveries to our creditors or provide recovery for our equity holders," Visteon said in the letter.

"Additionally, the realization of other risks associated with the proposed transaction would negatively impact our creditors and leave equity holders further removed from any recovery.

"It is also likely your proposal would involve a lengthy extension to the time we would remain in bankruptcy, which could undermine much of the successful work we have done to emerge as a strong company in the sector."

Visteon said Johnson Controls' proposal "does not warrant further consideration."

In addition, Visteon told Johnson Controls that it was concerned that the latter's recent contacts with Visteon's customers and "aggressive characterizations of your proposal could potentially damage our business and relationships with key customers."

Visteon asked Johnson Controls to end the communications with customers.

Visteon, a Van Buren Township, Mich., global automotive supplier, filed for bankruptcy on May 28, 2009 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 09-11786.

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