By Marcel Michelson
FRANKFURT (Reuters) - French car parts maker Valeo (VLOF.PA: Quote, Profile, Research, Stock Buzz) could soon be back on the acquisition trail as asset prices have returned to more affordable levels now the credit crisis has diminished the appetite of private equity firms.
"Absolutely, I believe that prices are getting reasonable, and therefore you will probably see Valeo on the acquisition side next year," Chairman and Chief Executive Thierry Morin said at the Reuters Autos Summit in Frankfurt.
"Not enlarging our portfolio of products -- we do not believe we that need at all -- but strengthening the technology of our products ... in electronics, or power electronics, which are getting more important," he added.
Morin last year unveiled his strategy for the period up to 2010, which includes an operating margin of more than 6 percent and a return on capital employed of 27 percent, which will require better utilization of machines, a leaner organization and reduced working capital.
The strategy was unveiled at a time when Pardus Capital Management was building up a stake. It is now the single biggest share holder, with 18 percent. Valeo rejected a request by Pardus for eight board seats and a strategy overhaul.
Morin said Pardus had wanted Valeo to acquire Visteon (VC.N: Quote, Profile, Research, Stock Buzz), in which the fund also has a stake, and added this would have destroyed value for the other shareholders of Valeo.
"You cannot have one shareholder pursuing a strategy that may be negative for other shareholders," he said.
He noted Pardus had since taken stakes in the U.S. airlines sector and in French technology firm Atos Origin. (ATOS.PA: Quote, Profile, Research, Stock Buzz). Continued...
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