United Technologies Reveals Details of $2.63 Billion Bid For Diebold

By Mike Caggeso
Associate Editor

Diebold Inc. (DBD), a top maker of voting machines and automated teller machines, rejected an unsolicited $2.63 billion bid from United Technologies Corp. (UTX) yesterday (Monday).

The offer amounted to $40 a share, a 66% premium over Diebold's Friday closing price of $24.12.

Diebold Chairman John Lauer called the approach "an opportunistic attempt to buy Diebold at a time when shareholders do not have sufficient data to evaluate the offer and as such, the board believes that it would be irresponsible to engage in discussions with UTC at this time."

United Technologies produces a wide variety of high-tech products and services – including Otis elevators, UTC Fire & Security systems and Carrier heating and refrigeration.

James Geisler, United Technologies' vice president of finance and the head of its mergers and acquisitions team, said similar offers made in the past two years  [Diebold's stock was trading around $40 a share in March 2006] have been declined.

Diebold said its board met to discuss United Technologies' interest in a potential tie-up at least three times recently. However, the company's board still isn't convinced that a merger would be in the best interest of the corporation or its shareholders at this time.

Diebold has conceded to a U.S. investigation of its accounting practices and recently announced plans to cut 5% of its workforce. In 2004, it was criticized for flawed electronic voting machines. Stock fell about 48% since in the past year.

United's Geisler said having Diebold's roster of products would expand his company's electronic security business. And United Technologies' ground crew of sales and maintenance for its Otis elevator line could be adapted to the ATM business, Geisler told the Chicago Tribune.

Last year, United Technologies bought Initial Electronic Security Systems for about $1.2 billion.

Shares of Diebold soared 61.03% with a $14.72 gain to close at $38.84 yesterday.

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