(Corrects Lear's cash and equivalents, as of Dec. 31, in
paragraph 5 to $1.40 bln from $918 mln)
* Lear says would buy back $800 mln shares in next 12 months
* To start on new $750 mln buyback program soon after
* To increase board to nine members from eight
* Lear shares up 1.3 pct
April 1 Auto parts maker Lear Corp
avoided a proxy battle with investors Marcato Capital Management
LLC and Oskie Capital Management LLC by agreeing to increase and
quicken the pace of its share buyback program and add a board
The company, which repurchased $200 million of its shares in
the first three months of 2013, said it would buy back the
remaining $800 million in its program in the next 12 months.
Lear had earlier said it would complete the program by the end
Lear also said it would start on a new $750 million buyback
program soon after the current plan ended.
"Over the past two years, Lear has returned more cash to
shareholders through dividends and share repurchases as a
percentage of our market capitalization than any of our
automotive supplier peers," Chairman Henry Wallace said in a
The company, which has a market value of more than $5
billion, had cash and equivalents of $1.40 billion as of Dec. 31
and no short-term debt balances outstanding. It had long-term
liabilities of $1.37 billion.
"When you look at the financial impact of doing the
repurchases, it will not put Lear at a compromised position,"
Guggenheim Securities LLC analyst Matthew Stover said.
Lear has the flexibility to invest in its own business as
well as to pursue acquisitions, Stover said.
Southfield, Michigan-based Lear reported a fourth-quarter
profit in February that beat analysts' expectations.
EXPANDING THE BOARD
Marcato - run by Mick McGuire, one of activist investor
William Ackman's former partners - said in February it planned
to nominate candidates to the board.
The shareholder reported a 5.2 percent stake in Lear then,
but said in March it had raised that amount to 5.9 percent. (r.reuters.com/fyg46t)
Marcato and Oskie have withdrawn their slate and will
support Lear's nominees, the company said on Monday, after it
agreed to expand its board to nine from eight.
"We are very pleased to have worked constructively with
Lear's management to reach this favorable outcome for all
shareholders," Marcato Founder Mick McGuire said in a statement.
Marcato's other top holdings include GenCorp Inc,
Cincinnati Bell Inc and DineEquity Inc.
Spokesman Tom Davies declined to comment beyond the joint news
In 2007, Lear rejected a $3 billion buyout attempt by an
affiliate of billionaire investor Carl Icahn.
Lear's shares were up 1.3 percent at $55.57 in morning
trading Monday on the New York Stock Exchange. They have gained
8 percent since Feb. 8, when Marcato said it would nominate
candidates to the board.
(Reporting by Sagarika Jaisinghani and A. Ananthalakshmi in
Bangalore; Editing by Sriraj Kalluvila and Saumyadeb