Billionaire investor Carl Icahn plans to increase his stake in
and buy $200 million of the auto interior maker's stock through a private placement.
Lear said Tuesday that it will sell roughly 8.7 million shares at $23 apiece to affiliates of Icahn and certain of his funds. As part of the transaction, Icahn will have the right to put a representative on Lear's board.
After the deal, Icahn will hold about 9.1 million Lear shares, with economic exposure to an additional 5.8 million shares, according to a
Securities and Exchange Commission
filing. Lear has about 67 million shares outstanding.
"Our increased investment reflects our confidence in Lear's management team and our optimism about the future value of the company," said Icahn in a statement. "We look forward to the opportunity to work actively with management and the other members of the Lear board to help increase value for all shareholders."
Lear, which as struggled in recent years amid the downturn in the U.S. auto industry, said the proceeds of the offering will be used for strategic investments and to provide increased financial and operating flexibility.
Shares of Lear jumped on the news and were recently up $2.36, or 9.6%, to $26.95.
The company also said it expects to post a third-quarter pretax loss of $60 million to $70 million, including $17 million in restructuring costs and a loss of $29 million on the sale of its European interiors business. Lear estimates that sales of the quarter totaled $4.1 billion, above Thomson First Call's average analyst forecast of $3.93 billion.