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Diebold rejects unsolicited takeover bid
NORTH CANTON, Ohio (3/4/08)--The board of directors of ATM manufacturer Diebold Inc. has unanimously rejected an unsolicited takeover proposal from United Technologies Corp. (UTC), Diebold announced Monday. The board is recommending that shareholders take no action related to the proposal. UTC, an electronic security business provider specializing in aerospace and building services, including Otis elevators, is based in Hartford, Conn. It first approached Diebold two years ago. The company said Sunday the bid was for $3 billion, which amounts to $40 a share in cash or a 66% premium over Diebold's closing price of $24.12 on Friday, according to The New York Times and The Wall Street Journal (March 3). Diebold, a CUNA Strategic Services provider, is the maker of Opteva and other ATMs used by many credit unions. In a press release, Diebold said the board recently completed a review of the company and its prospects. It met at least three times in the past month to discuss the proposal. Diebold said it has not filed financial statements since the company's 10-Q for the quarter ended March 31, 2007, which was reported previously, and that it is working to become current in its filings with the Securities and Exchange Commission (SEC). Its board "believes that now is not the right time--and that it would not be in the best interests of the corporation or its shareholders--to pursue discussions with UTC." John N. Lauer, non-executive chairman of the board at Diebold, said, "The board strongly believes that UTC's proposal significantly undervalues the company and fails to reflect Diebold's strengths and significant upside potential." He called the proposal "an opportunistic attempt to buy Diebold at a time when shareholders do not have sufficient data to evaluate the offer" and noted it would be "irresponsible to engage in discussions with UTC at this time." Last week, Diebold said it would cut 800 jobs--roughly 5% of its work force--in anticipation of a slowing demand for ATMs. After the takeover bid was announced, Diebold shares soared more than 60% at the opening of trade Monday.
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