United Technologies ( UTX) Sunday announced it has made an unsolicited bid to acquire Diebold ( DBD) for $2.63 billion.
United Technologies, a Hartford, Conn.-based conglomerate whose businesses include Otis elevators, Carrier heating and air-conditioning systems and Pratt and Whitney airplane engines, said it wants to pay $40 a share in cash. That represents a 66% premium to Diebold's closing stock price on Friday of $24.12. North Canton, Ohio-based Diebold makes automated teller machines, voting machines and security systems. "Diebold represents an excellent fit with UTC, with its strong market position, U.S. footprint, and balance between product and service revenues," said George David, the CEO of United Technologies, in a press release announcing the bid. "In addition, Diebold will benefit from UTC's international presence and disciplined operating systems." United Technologies said it decided to make its offer public after Diebold rejected its overtures. United Technologies' CEO had tried for two years to negotiate a combination, according to correspondence between the two companies that was included in the press release. On Feb. 19, he sent a letter to John Lauer, his counterpart at Diebold, saying United Technologies wanted to acquire Diebold for cash at a significant premium to its recent stock price. But Lauer wrote back on Feb. 21, saying Diebold's board had determined that it wasn't in the best interests of his company or its shareholders to pursue talks with United Technologies. Shares of United Technologies closed Friday at $70.51.