Visteon Corporation on June 1 announced that after a thorough analysis, it has rejected an unsolicited proposal from Johnson Controls Inc. to purchase certain assets associated with Visteon's interiors and electronics businesses. Visteon conveyed the reasons for its decision in a letter sent today from Visteon to Johnson Controls. The contents of the letter follow:
“The board of directors of Visteon has studied your proposal carefully and has unanimously concluded that our stakeholders, as well as our customers and employees, are best served by moving forward with our previously announced plan of reorganization to emerge from bankruptcy as a strong, independent, stand-alone company.
“Following your expression of interest in acquiring certain assets associated with our interiors and electronics businesses, our board, assisted by the company's financial advisers, took the time to conduct a thorough review and analysis of your proposal.
“Without risk-adjusting your proposal, our careful analysis demonstrates that your acquisition of selected assets, while excluding certain liabilities, would accelerate other costs and would not significantly enhance recoveries to our creditors or provide recovery for our equity holders. “Additionally, the realization of other risks associated with the proposed transaction would negatively impact our creditors and leave equity holders further removed from any recovery. It is also likely your proposal would involve a lengthy extension to the time we would remain in bankruptcy, which could undermine much of the successful work we have done to emerge as a strong company in the sector.
“In short, we have determined that our plan of reorganization is the best path forward for Visteon and that your proposal does not warrant further consideration. Given all of the above, we trust you will respect our decision.
“On a related matter, I am concerned that JCI's recent contacts with our customers and aggressive characterizations of your proposal could potentially damage our business and relationships with key customers. I assume these communications are occurring without your knowledge and ask that you personally see that such communications end.
“Finally, because of the public announcement of your proposal, the company is obliged to share the contents of this letter with its stakeholders, and intends to do so imminently through a press release.”
Visteon Corporation is a leading global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers. With corporate offices in Van Buren Township, Mich.; Shanghai, China; and Chelmsford, United Kingdom, the company has facilities in 25 countries and employs approximately 28,500 people.