HARTFORD, Conn. — Diebold Inc. may find it impossible to resist a $2.63 billion buyout offer by United Technologies Corp., which is aggressively seeking to expand its security business in Asia, observers said Monday.
United Technologies on Sunday offered $40 a share, a 67 percent premium over Diebold’s closing price Friday. Diebold shares climbed $14.72, or 61 percent, Monday to $38.84. United Technologies shares fell $1.11 to $69.40.
Diebold turned down the bid Monday, calling it opportunistic, and urged its shareholders to take no action.
Peter Murphy, a spokesman for United Technologies, said the company is disappointed with the response from Diebold officials, “and we presume their shareholders are as well.”
Nicholas Heymann, an analyst at Sterne Agee, said Diebold’s board of directors will be under pressure to sell.
“Here’s $40. See if there’s any way in the world you can explain to shareholders you’d be up to $40 in the near future,” he said.
Page Davidson, a lawyer for Bass, Berry and Sims in Nashville, Tenn., which typically represents sellers in acquisition deals, said the price offered by United Technologies will be hard to reject.
“At that kind of premium, it’s going to be pretty difficult to not engage in some kind of process now in response to pressure from the shareholder base,” he said. “The board’s fiduciary duty is to take the action it believes is in the best long-term interest of shareholders.”
Diebold, a North Canton, Ohio-based manufacturer of ATMs and voting machines, said United Technologies’ offer undervalues the company’s potential growth.
“UTC’s proposal is an opportunistic attempt to buy Diebold at a time when shareholders do not have sufficient data to evaluate the offer,” said John Lauer, nonexecutive chairman of Diebold’s board.
The offer by United Technologies — the parent company of elevator maker Otis, jet- engine maker Pratt & Whitney, and Sikorsky Aircraft, which manufactures helicopters — would add “strategic depth” to its fire and security business in North America, Heymann said in a note to investors.
Mark Demos, an analyst at Fifth Third Asset Management in Minneapolis, said United Technologies’ strong revenue also would support increasingly complicated ATMs that offer automated check imaging, new encryption software and other features.
“They’re kind of potentially making a bid when things are getting more complex and there’s more of a revenue stream,” he said.
