UTC makes US$3B hostile bid for Diebold

The e-voting systems parent company spurned previous UTC offers over two years

Diebold, the parent company of e-voting systems vendor Premier Election Solutions, is in the crosshairs of a hostile acquisition attempt by conglomerate United Technologies (UTC). In an announcement, UTC said it is making an offer for Diebold because it would tie in well with its existing businesses.

"Diebold represents an excellent fit with UTC, with its strong market position, US footprint, and balance between product and service revenues," George David, chairman and CEO of UTC, said. "In addition, Diebold will benefit from UTC's international presence and disciplined operating systems."

The UTC offer, which has been proposed to Diebold's board, calls for the acquisition of all Diebold shares at US$40 each, or a 66 per cent premium over its February 29 per-share price. If the deal goes through as proposed, it would be valued at about US$3 billion.

Spokespersons for UTC and Diebold could not be reached for comment at deadline.

In a February 29 letter to Diebold Chairman John Lauer, David wrote that UTC has wanted to acquire Diebold for about two years through "constructive discussions," but that the attempts have not been successful.

In a February 21 letter to David, Lauer wrote that "the prior overtures on your behalf to me and another Diebold director were discussed extensively at a regularly scheduled Diebold board meeting last week. After careful consideration, our board unanimously determined at that meeting that it was not in the best interests of the corporation or its shareholders to pursue discussions with UTC regarding a business combination with Diebold. Nothing has changed since that meeting that warrants revisiting this issue."

Last August, Diebold changed the name of its e-voting systems business to Premier Election Solutions, which previously had been called Diebold Election Systems. Diebold is also the parent company of vendors of a wide range of self-service delivery and security products.

UTC is the parent company of jet-engine maker Pratt & Whitney, helicopter maker Sikorsky Aircraft and elevator manufacturer Otis, among other companies.

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