ArvinMeritor's tender offer one way to help company sharpen its focus

By Lisa Kerner

Charlotte, N.C., March 2 - ArvinMeritor Inc. increased the purchase price in its tender offer for up to $175 million of its $276 million 8¾% notes due 2012 to a price it believes is fair to investors and will allow the company to successfully execute the tender offer, according to senior vice president of communications Lin Cummins.

As previously reported, for each $1,000 principal amount accepted for purchase, holders will receive $1,097.50 for notes tendered by 5 p.m. ET on March 8 and $1,067.50 for notes tendered after that time.

ArvinMeritor, prior to the change, was offering $1,065 for notes tendered by the early tender date and $1,035 for notes tendered after that time.

The company will fund the purchase with the proceeds of its new $250 million 10 5/8% senior notes due 2018.

The tender, which ends on March 22, has the effect of extending the company's 2012 debt maturity, which "allows the business to focus on executing its strategies without any looming debt maturities and allows the stock to trade more based on the fundamental earnings power of the business," Cummins said in an e-mail.

Cummins said the offer fits with the company's investment strategy that it recently articulated at various investment venues.

ArvinMeritor wants to extend its revolving credit facility and 2012 debt maturities "to clear the runway for the next few years from a debt maturity standpoint," said Cummins.

Troy, Mich.-based ArvinMeritor is a supplier of integrated systems, modules and components to the motor vehicle industry.

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