Analyst: Lear's Eagle Buy 'Won't Preclude Stragegic Options'

Lear Corp.'s

unconfirmed plan to buy automotive leather maker Eagle Ottawa LLC for about $800 million won't preclude the company from buying back shares or getting sold, an analyst said Wednesday. Deutsche Bank's Rod Lasche said the move to acquire privately held Eagle eventually could spur the split of Lear's seating business from its electrical unit "should such an opportunity arise." Assuming Lear makes the Eagle acquisition with a 50-50 cash and debt financing, Lasche says resulting cash flow will be adequate to fund Lear's existing $750 million, two-year buy back plan. The deal will "slightly" dilute Lear's stock value but "ultimately will be as strategic" and boosting its earnings, Lasche said. Lear last year settled with activist investors Marcato and Oskie Capital Management, avoiding a proxy battle by granting the dissidents a board seat and agreeing to an accelerated buyback plan. Marcato recently sold 5 million call options in Lear, cutting its stake to about 1.1 million of the company's 80 million shares outstanding. Lear traded recently at $99.40 a share, up 1.2 percent.