UTC announced Monday that it was willing to pay nearly $3 billion in cash to buy Diebold, one of the leading makers of automated teller machines and electronic voting systems. UTC said it would pay $40 a share for Diebold's stock, which UTC said represents a 66% premium over Diebold's closing stock price Friday and a 45% premium to the three-month trailing average. It is not subject to financing contingency, according to United Technologies.
"This transaction creates significant and immediate value for Diebold shareholders with no operational risk, while creating long term value for UTC shareholders," George David, chairman and CEO of United Technologies, said 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."
David added, "In view of the significance of this proposal to Diebold's shareholders and our own, we feel compelled to release this offer publicly. We are committed to working with Diebold's Board of Directors to enter quickly into a definitive agreement." David said that UTC disclosed the correspondence to allow Diebold's shareholders to capitalize on the transaction immediately.
In a letter to Diebold Chairman John Lauer, David said his aerospace industry technology company wants to finance the share acquisition with cash and can go ahead with the purchase without a shareholder vote.
"We and our counsel do not see regulatory impediments," he wrote. "We have suggested appropriate due diligence earlier and affirm this now. Additional value could be identified, and a higher price proposal for Diebold's shares could result. We are prepared to begin immediately and believe a definitive agreement can be completed within 30 days."
He said the companies are a good match because of UTC's global reach, technical capabilities, track record, and top rating for shareholder return among Dow Jones Industrials over the last 10 years.
Earlier this month, Lauer said Diebold board members do not believe the offer would benefit Diebold and he asked that David refrain from contacting Diebold's decision-makers.