Federal-Mogul shuns cash bid

LUCASVARITY yesterday edged closer to a pounds 4bn takeover by its US rival TRW after Federal-Mogul hinted that it would not launch an all-cash counterbid for the British the car parts and aerospace group.

However, Federal-Mogul said it could raise its initial pounds 3.6bn cash-and- paper offer for Lucas in a bid to trump TRW's cash bid. Federal-Mogul, one of the largest car parts makers in the US, is due to decide on a counterbid over the next few days after spending more than a week examining the Lucas books.

The news came as TRW was preparing to post its offer document to Lucas shareholders this weekend. In a briefing with US investors, the chief executive Dick Snell said that it was "unlikely" that the company would mount an all-cash assault on Lucas.

Industry analysts had been predicting that Mr Snell would find it difficult to summon the financial resources for an all-cash offer due to Federal- Mogul's overstretched balance sheet.

Mr Snell's statement is a blow for Lucas UK shareholders who are unwilling to hold US paper and have been hoping for a cash bid from Federal-Mogul. City analysts were last night predicting that if Mr Snell is to succeed in the battle with TRW he would have to devise a method to allow British shareholders to take the cash, leaving the Federal-Mogul shares to US investors. Many UK institutions, which account for about 45 per cent of Lucas shareholders, are not allowed to own US shares and are set to vote down any cash-and-paper offer.

During the briefing, Mr Snell said that, if Federal-Mogul wins the bid war, it would quickly sell Lucas aerospace business. "Aerospace does not fit at all ... We have had wild interest in the business from the aerospace industry and an heated auction for that is easy to conceive."

The division could attract bids from a number of companies in the rapidly consolidating aerospace industry. City analysts said the list of potential bidders would be topped by the UK groups Smiths Industries and TI, with several US groups also likely to enter the fray.

PROMOTED VIDEO
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible