Financial mechanics

3 May 2007 By Pierre Briancon

The car parts manufacturer would consider giving the US fund board representation but only on its own terms. But Pardus has dropped its insistence on a merger with Visteon and now says it only wants a strategic review. It should be allowed in.

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Valeo, the French car parts manufacturer, has turned down the request of Pardus Capital Management to be able to appoint two representatives on the company's board. The USbased investment fund has built up a 13% stake in Valeo and is its main shareholder. It also holds a 17% stake in US cart parts maker Visteon, and has suggested the two companies initiate a merger.

Valeo said it offered Pardus one board seat, but the investment fund denies the offer was ever made.

On top of its two representatives, Pardus also submitted a list of six candidates for "independent" directorships at Valeo, including former Arcelor chairman Guy Dolle or former Suez COO Francois Jaclot. All of them were turned down by Valeo, who will submit its own candidates at the company's annual shareholders meeting May 21.

Meanwhile, Thierry Morin, Valeo's chairman and chief executive, Thursday said in an interview with Dow Jones Newswires that he had received a nonbinding offer from one of the privateequity players the company is currently talking to on an informal basis. Morin added that he doubted Valeo would ever be bought by a privateequity fund.

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