Auto Maker: Stop Hostile Takeovers
HARTFORD, Conn. (AP) _ Auto parts maker Echlin Inc. asked Connecticut lawmakers Monday to approve a bill that would make hostile takeovers more difficult in this state. Echlin is currently fending off a buyout offer from SPX Corp. of Muskegon, Mich.
The bill would stop raiding companies from calling special meetings to oust the target company’s board of directors and replace them with directors that support the takeover.
Under the proposal, no directors could be removed at a special meeting without cause within a year of a company gaining control or intending to gain control of 10 percent or more of the target company. The bill would also bar any new directors installed by the takeover company from voting on whether to accept the buyout offer.
Echlin’s general counsel, Jon Leckerling, accused SPX of wanting to ``put in a puppet board″ in the company. Branford-based Echlin, which employs 900 Connecticut residents, also claimed SPX wants to cut jobs.
But John Blystone, SPX’s chairman, president and chief executive, says a takeover would make Echlin stronger and boost the value of its stock, which has been stagnant despite a major bull market on Wall Street.
Blystone pledged to lawmakers to keep Echlin’s manufacturing jobs and other community services and donations the company has provided.
He said if Echlin wanted to stop the takeover bid, the company could have changed its rules during a December meeting to allow its nine-member board of directors to serve staggered terms, instead of being elected all at once.
Instead, Blystone likened Echlin’s appeal to a ``Hail Mary pass at a football game.″
The committee has until March 23 to act on the bill.