UTC announces bid to buy Diebold for $3 billion

SSN Staff  - 
Friday, February 1, 2008

HARTFORD, Conn.—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 Diebold’s stock price has fallen nearly 50 percent in just the last six months and the proposal represents a price stockholders haven’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 “the proposal is not subject to any financing contingency.”
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 “This transaction creates significant and immediate value for Diebold shareholders with no operational risk, while creating long term value for UTC shareholders,” said George David, Chairman and CEO of United Technologies, in a statement. “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 UTC’s international presence and disciplined operating systems.”