UTC gives up on Diebold
Remember that UTC bid for Diebold? No, seriously, do you remember that? Well, turns out it ain't gonna happen, after all. After some previous bombast, UTC's note to Diebold announcing that it's giving up on the bid is pretty succinct: Mr. John N. Lauer Chairman Diebold, Inc. Dear Mr. Lauer: We have seen Diebold's financial restatements recently filed with the SEC and note that you have scheduled your annual meeting for November 12. In light of your extended refusals of UTC's requests for management discussions and due diligence, we are withdrawing our offer of February 29 to purchase any and all Diebold common shares at $40 per share. We had hoped we could negotiate a transaction that would have created substantial value for both your and our shareholders. It's unfortunate this won't happen. Sincerely yours, George David Chairman So, to sum up, Diebold did $1.5 billion in the first six months of 2008, with net income of $41 million, and UTC was offering about $2.6 billion for the whole kit and kaboodle. It's kind of easy to see why Diebold management wasn't eager to sell. However, Diebold stock sits at $27.77 at the moment of this writing, and it's hard to see how the stockholders are served by denying them a 30 percent premium on their shares . If I'm a Diebold shareholder (and I'm not), I'd be pretty psyched to get rid of my shares for $40 a whack, considering Diebold spent all summer valued right around $40, based on the UTC offer, and then plummeted to its current position what with the financial crisis (Diebold does a lot of business in banks) and general panic. Of course, the stock market makes no sense, since the positive numbers Diebold finally reported should have had a positive effect on the share price, but instead drove it down. If they're pulling in $3 billion, which is nearly $47 a share, they should be valued higher than $28 a share, if you ask me.