Firestone Seeks Alternatives to Pirelli Proposal : Joint Venture With Bridgestone Also Put Off
Firestone Tire & Rubber Co. said late Monday that it would seek alternatives to an unsolicited $1.8-billion buyout offer from Pirelli Group, and that it did not expect to complete its previous agreement to sell most of its tire operations to Bridgestone Corp.
In a news release, Firestone said its board of directors met to consider Pirelli’s tender offer to acquire Firestone for $58 a share but took no action on the bid.
However, the board authorized Firestone management to explore alternatives--possibly including a new deal with Bridgestone--”in order to permit the board to conduct a thorough and fully informed evaluation” of the Italian tire maker’s offer.
The company also said that, in light of Pirelli’s offer, it was unlikely to consummate the joint venture agreement it announced with Japanese tire maker Bridgestone on Feb. 16. Under that agreement, Bridgestone would pay about $1.25 billion to buy 75% of Firestone’s tire operations.
Pirelli’s offer is contingent on Firestone dropping its plans to enter the joint venture with Bridgestone.
Stock Dips on NYSE
Firestone said that in seeking alternatives to the Pirelli offer its advisers had begun discussions with Bridgestone.
The board indicated it would meet again this week to complete its review of Pirelli’s offer and reiterated its stance that shareholders should not tender their shares until the board issued its recommendation. Firestone had stated previously that the board would make its recommendation by Friday.
Firestone stock dipped 87.5 cents to $61.625 a share in active trading on the New York Stock Exchange.
Earlier, a federal court in Cleveland heard arguments over Pirelli’s suit attempting to block Ohio’s anti-takeover law as unconstitutional.
Pirelli is seeking a temporary restraining order to keep the Ohio Control Share Acquisition Act from affecting its bid for Firestone. The act requires a hostile bidder to wait up to 50 days for shareholders to vote before he can acquire tendered shares.
