Visteon shares are at their highest level in over three months

Article by Christian Andrei, on September 2, 2012

The shares of U.S. auto-parts maker Visteon Corp. are at their highest level in over three months following Mando Corp.’s statement that it may submit a bid for the 70% stake of Visteon in Halla Climate Control Corp., the former affiliate of Mando. Visteon’s shares rose by 8.4% to $46.00 at 12:33 p.m. in New York. It had earlier reached $46.46, its highest price since May 7.

From the start of the year through Wednesday, its shares had decreased by 15%. This took place as Visteon faltered in its plan to discard lower-margin units and concentrate on quicker-growing operations mainly in Asia. Visteon, which was spun off from Ford Motor Co. in 2000, has experienced a 31% surge this month based on rumors that it may draw in a bid for Halla Climate shares or be subjected to a direct takeover offer.

In Mando’s regulatory filing, it stated that Mando has secured the services of an adviser but that nothing has been decided yet. Last July, Visteon failed in an attempt to purchase the remaining 30% of Halla Climate, which produces automotive air conditioners. South Korea’s National Pension Service, which is 8.1%-owned by Halla, turned down the U.S. company’s proposal and got into a preliminary agreement so that Mando could get the preferred bidder status for the fund’s stake.

Last July, Visteon also cut a deal to sell most of its interiors business to its joint venture with Huayu Automotive Systems Co. Visteon’s CEO Don Stebbins has agreed to resign on Aug. 10.

The company’s board had named supplier executive Tim Leuliette as interim chairman, president and CEO. Ryan Brinkman, an analyst with JPMorgan Chase & Co. in New York, increased his price target on Visteon from $35 to $50. He put a value on Visteon on a sum-of-its-parts basis at $56 for each share.

Topics: visteon, shares

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