July 17 German car parts maker ZF Friedrichshafen AG can raise its bid for U.S.-based TRW Automotive Holdings Corp to as much as $13 billion, Bloomberg reported, citing people with knowledge of the matter.
ZF's lenders have said financing is available for a higher all-cash bid and the German company is exploring a proposal that values the TRW at between $110 and $112.50 per share, Bloomberg reported. (bloom.bg/1mkKR3S)
ZF said last week that it was in early-stage buyout talks with the American auto parts supplier, but did not disclose any financial details. A Bloomberg report at the time said ZF valued TRW at $11 billion to $12 billion.
Privately owned ZF is working with Citigroup Inc, and Morgan Stanley and several European banks are also advising the company and financing the deal, Bloomberg reported on Thursday.
The German company can borrow as much as $16 billion, Bloomberg calculated, based on ZF's ability to borrow as much as four times its and TRW's combined earnings before interest, taxes, depreciation and amortization.
Now that talks are public, the companies could reach an agreement in three to four weeks to prevent management disruption and allay concerns among automakers, Bloomberg said.
TRW North America spokesman John Wilkerson and ZF North America spokesman Bryan Johnson declined to comment. Citigroup and Morgan Stanley were unavailable for comment. (Reporting by Sudarshan Varadhan in Bangalore; Editing by Savio D'Souza)