Lear agrees to deal with pair of investment firms

NEW YORK (AP) -- Auto parts supplier Lear said that it has a deal with a pair of investment firms under which it will accelerate its share buyback program while the firms who hold a combined 5.6 percent stake in Lear drop their nominees to its board. Lear shares rose modestly on word of the deal in morning trading Monday. In February, Marcato Capital Management and Oskie Capital Management sent a letter to Lear Corp.'s board in which they said that they believed that the company was undervalued and blamed the "questionable" spending strategy of the board. The firms said at the time that they wanted Lear to buy back more of its stock and review its spending plans. Lear, which is based in Southfield, initially replied by defending its spending strategy. On Monday, Lear said that its board authorized management to further accelerate buybacks under an existing $1 billion repurchase program. Lear bought back $200 million of its outstanding stock in the first quarter. It now anticipates completing the remaining $800 million of the existing program within about the next 12 months. Lear's board also approved a new two-year $750 million repurchase program that will start immediately after the $1 billion buyback is complete. Lear said that as part of its deal with Marcato and Oskie, the firms have withdrawn their slate of board nominees and agreed to vote their shares in support of the company's nominees. The company has also agreed to increase the size of its board to nine members from eight. The new board member will be someone that is mutually acceptable to the company, Marcato and Oskie, Lear said. Lear's annual shareholders meeting will be held on May 16. Lear shares rose 94 cents, or 1.7 percent, to $55.81 in morning trading Monday. Its shares had risen to a 52-week high of $56.70 on March 15. They had fallen as low as $34.81 last July. Published: Tue, Apr 2, 2013