Icahn raises bid 3.5% for auto parts maker Lear

SOUTHFIELD, Mich. -- Carl Icahn raised his bid for Lear Corp. by 3.5 percent to $2.9 billion after opposition from investors. The auto parts maker delayed a vote on the sale again, by four days to July 16.

Lear's board approved the amended agreement with Icahn's American Real Estate Partners LP, the Southfield, Mich.-based auto supplier said yesterday. The revised offer is $37.25 a share, up from $36, or $2.8 billion, Lear said. Icahn also would get a $25 million breakup fee if his proposal fails.

The higher payout by Icahn, Lear's biggest shareholder, failed to sway Pzena Investment Management LLC, the second-largest and a leader among investors who felt the earlier bid was too low. Advisory firms Institutional Shareholder Services Inc., Proxy Governance Inc., and Glass Lewis & Co. also recommended against the previous plan.

"It's nice that we get an extra dollar, but it's not enough for us to vote for it, and I don't think it will be enough to sway any of the long-term players," said Richard Pzena, chief of New York-based Pzena Investment Management.

Lear, the world's second-largest maker of auto seats, has "met and talked with a number of shareholders and I think addressed many of their concerns," Daniel Ninivaggi, the company's general counsel, said. "A good deal has become even better, and we expect broad shareholder support."

On June 22, Icahn said he wouldn't raise his bid after the advisory firms' recommendations. The billionaire investor said that day that Lear shareholders "might be doing me a favor" by rejecting the $36-a-share offer.

Icahn didn't return a call.

The breakup fee in the revised proposal is $12.5 million in cash and 335,570 shares of Lear stock, valued at about $12.5 million.