(Adds ZF confirmation, analyst comment, updates share price)
By Mridhula Raghavan
July 10 Germany's ZF Friedrichshafen said it was
in early-stage buyout talks with U.S. auto parts supplier TRW
Automotive Holdings Corp.
TRW confirmed that it had received a takeover approach, but
did not name the suitor.
The companies did not disclose any financial details of the
deal, but a Bloomberg report said ZF valued TRW at $11 billion
to $12 billion.(bloom.bg/U5p7CG)
ZF's valuation for the $10-billion U.S. supplier is low, an
analyst from Tigress Financial Partners said, adding that Magna
International Inc could come up with a counter
"We feel the company is worth a lot more and would be a
strategic acquisition to a number of other component
manufacturers," Ivan Feinseth from Tigress Financial said.
Feinseth values TRW at between $120 and $135 per share. At
the higher end of this range, the company is valued at nearly
$15 billion, based on 110.76 million shares outstanding.
TRW shares rose as much as 11 percent to a life high of
$101.75 in early afternoon trading on the New York Stock
Exchange, giving the company a market cap of about $11 billion.
TRW, which had sales of $17.43 billion last year, said it
had hired Goldman Sachs & Co as financial adviser.
The Livonia, Michigan-based company makes airbags,
electronics, and braking and steering equipment for cars
globally, and sells to nearly all major automakers, including
Ford Motor Co and General Motors Co.
The company, which counts Volkswagen AG as its
largest customer, gets about 40 percent of its revenue from
Privately owned ZF Friedrichshafen, which supplies chassis
components to Audi AG and BMW, gets about
half of its revenue from Europe.
The company had revenue of 16.84 billion euros ($22.92
billion) in 2013.
TRW's shares have risen nearly 34 percent since the start of
the year up to Thursday's close.
($1 = 0.7345 euros)
(Additional reporting by Rohit T.K. and Sweta Singh in
Bangalore; Editing by Ted Kerr and Simon Jennings)