Collins & Aikman Corp (fka CKCR)

[Chinga]

Plastech Makes Bid for Collins & Aikman
8/9/2005 4:08:00 PM
DETROIT, Aug 09, 2005 (AP Online via COMTEX) -- Plastech Engineered Products Inc. has made a $1 billion bid to buy rival auto-parts supplier Collins & Aikman Corp., which filed for bankruptcy in May, according to a letter obtained Tuesday by The Associated Press.

"We would like to bring our competencies to C&A and help maximize value for its creditors, constituents and customers," Plastech chairman and Chief Executive Julie Brown said in the letter, which was sent to Collins & Aikman's board of directors.

Collins & Aikman spokesman David Youngman said the company was considering the offer.

"We are going to evaluate all legitimate offers as we continue to develop our business plan, and we will act accordingly in the best interest of our creditors to maximize the value of our enterprise," Youngman said.

Youngman wouldn't say whether any other companies have made bids to buy Collins & Aikman. He said there is no deadline for the company to respond to Plastech's bid.

Dearborn-based Plastech is the largest woman-owned company in Michigan. It was founded by Brown in 1988 and makes plastic vehicle components, including spoilers, mud flaps and interior door panels.

If the bid is successful, it would quadruple the size of privately held Plastech, which earns about $1 billion in annual revenues, Brown said in the letter. Collins & Aikman had total sales of $3.9 billion last year.

Plastech said it wants to start evaluating Collins & Aikman "as soon as possible, on an expedited basis, and at its own expense." Plastech said it could complete due diligence and submit a formal proposal within one month if it is given access to Collins & Aikman.

Plastech said it has hired Goldman Sachs Group Inc. as a financial adviser and believes it will be able to secure adequate financing for the deal.

Troy-based Collins & Aikman is one of the largest U.S. auto suppliers. It provides automotive flooring, fabric and instrument panels to the Big Three automakers as well as Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. Collins & Aikman supplies content to 90 percent of the vehicles made in North America, according to the company.

The supplier filed for bankruptcy on May 17, shortly after the resignation of its chairman and CEO David Stockman, a former congressman who also served as budget director in the Reagan administration. The bankruptcy filing was widely expected for the troubled supplier, which was struggling with the high cost of steel and other raw materials and production cuts at General Motors Corp. and Ford Motor Co., the two biggest U.S.-based carmakers.

Collins & Aikman is working on a business plan that is scheduled to be released later this month. On Monday, a federal bankruptcy court allowed Collins & Aikman to collect $82.5 million in temporary price increases from its customers.

---

On the Net:

Plastech Engineered Products Inc., http://www.plastecheng.com/

Collins & Aikman Corp., http://www.collinsaikman.com/