UTC announces bid to buy Diebold for $3 billion
HARTFORD, Conn.Ã¢â‚¬â€Diebold stockholders have a serious proposal to consider. United Technologies, whose UTC Fire & Security branch owns integration firm Red Hawk, has offered $40 a share to purchase all outstanding shares of Diebold, which makes ATMs and operates a significant security integration business.
The offer represents a roughly 60 percent premium over the Feb. 29 close of $24.12. And stockholders may be eager to accept, as DieboldÃ¢â‚¬â„¢s stock price has fallen nearly 50 percent in just the last six months and the proposal represents a price stockholders havenÃ¢â‚¬â„¢t seen since November.
In a press release, UTC pegged the total enterprise value at $3 billion, though some Wall Street analysts have set the total lower. Perhaps most significantly, UTC has stated that Ã¢â‚¬Å“the proposal is not subject to any financing contingency.Ã¢â‚¬Â
According to documents released by UTC, Diebold was initially contacted about this offer Feb. 19 and rebuffed discussions of a buyout. UTC is now going public because Ã¢â‚¬Å“This transaction creates significant and immediate value for Diebold shareholders with no operational risk, while creating long term value for UTC shareholders,Ã¢â‚¬Â said George David, Chairman and CEO of United Technologies, in a statement. Ã¢â‚¬Å“Diebold represents an excellent fit with UTC, with its strong market position, U.S. footprint, and balance between product and service revenues. In addition, Diebold will benefit from UTCÃ¢â‚¬â„¢s international presence and disciplined operating systems.Ã¢â‚¬Â