In a terse letter to the Federal-Mogul Holdings Corp. (NASDAQ: FDML), activist investor Carl Icahn’s Icahn Enterprises L.P. (NASDAQ: IEP) on Monday morning raised its offer for the remaining shares of Federal-Mogul that Icahn doesn’t own from $7 to $8 a share. Icahn already owns about 82% of the auto parts maker.
At the time of Icahn’s February offer the $7-per-share price represented a premium of more than 40% to the price of the stock. Icahn also had agreed that the offer required approval from a special committee of independent directors, along with a vote of a majority of non-Icahn held shares.
Shortly after the February offer, Federal-Mogul cancelled a planned spin-off of its motor parts business from its power-train business after the separation had been on the boards for more than a year. The chief executive of the motor parts division said the cancellation was due to lousy market conditions, not the offer from Icahn.
The same terms apply to Monday’s offer, and Federal-Mogul said it would consider the new offer.
What is there to think about? When Icahn first offered to buy the rest of Federal-Mogul, an analyst from private equity firm Gamco Investors (Gabelli) thought that the company’s restructuring in preparation for the proposed spin-off was beginning to pay off and that increased profitability was on its way. In March, Gamco reported that it owned about 4.6% of Federal-Mogul’s stock, so you could say that it has a dog in the hunt. Gamco’s analyst, Brian Sponheimer, put a value of $13 per share on the stock.
Shares traded up 7% at $8.73 Monday morning and have traded as high as $10 a share following the February offer. That’s still below the 52-week high of more than $12, but well above the sub-$4 per share price just prior to the February bid.
The Average American Is Losing Their Savings Every Day (Sponsor)
If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4% today, and inflation is much higher. Checking accounts are even worse.
Every day you don’t move to a high-yield savings account that beats inflation, you lose more and more value.
But there is good news. To win qualified customers, some accounts are paying 9-10x this national average. That’s an incredible way to keep your money safe, and get paid at the same time. Our top pick for high yield savings accounts includes other one time cash bonuses, and is FDIC insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes and your money could be working for you.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
