Shares of Federal-Mogul Are Soaring After Carl Icahn Bid
Billionaire Carl Icahn’s investment company offered to buy the 18% of auto parts maker Federal-Mogul Holdings (FDML) that it does not already own for about $213 million.
Shares soared more than 40% in pre-market trading following the news.
Icahn Enterprises (IEP) has been focusing on its auto business, its second largest by revenue, as a slump in crude prices slows growth in its energy business, which accounted for nearly half of its revenue in 2014.
The company said in December it would buy auto parts retailer Pep Boys-Manny Moe & Jack for about $1 billion.
Icahn Enterprises, which owns about 82% of Federal-Mogul, said it would pay $7 per share in cash, representing a premium of about 41% to the stock’s Friday closing.
The offer values the company at about $1.2 billion, based on the company’s shares outstanding as on Sept. 30.
Federal-Mogul said its board would appoint a special committee to review the offer.