News release

CalSTRS Rejects Icahn Offer for Lear Corporation

 SACRAMENTO, CA  – The California State Teachers’ Retirement System has decided to vote its 1.4 million shares of common stock in the Lear Corporation against the merger with the Carl Icahn unit, American Real Estate Partners (AREP).CalSTRS believes that the offer price is too low, by almost half, and that the long-term value of Lear will be realized more successfully if the current merger is not consummated.CalSTRS wrote a letter to the corporation’s Chairman and Chief Executive Officer detailing its concerns with the merger and informing the company that CalSTRS is pursuing the filing of its Appraisal Rights under Delaware Law.

“This merger makes no economic sense for the shareholders of Lear Corporation and the stunningly inadequate price causes us to wonder about the board’s representation of shareholders in this transaction,” said Christopher J. Ailman, CalSTRS Chief Investment Officer.

“CalSTRS owns almost two percent of the outstanding shares of Lear and is a long-term holder of the stock; we do not want to see the long-term value accrue to favored share owners like Carl Icahn at the expense of the other 85 percent of shareholders. Although we are mindful of the $100 million termination fee that exists in this deal, we believe that this merger should be terminated and that the company should be shopped in a transparent and arms-length manner. CalSTRS supports Delaware Chancery Judge Strine’s decision to require Lear to disclose more information on this deal to its investors before that meeting was to have taken place on June 27, 2007,” Mr. Ailman concluded.

Update: July 16, 2007

Lear Corporation shareholders rejected the Icahn buyout offer today, according to Lear company officials. CalSTRS was joined in opposing the buyout by major shareholder Pzena Investment Management LLC and three shareholder advisory services: Institutional Shareholder Services, Proxy Governance and Glass Lewis & Co.

With a $171.1 billion investment portfolio, the California State Teachers’ Retirement System is the second-largest public pension fund in the United States. It provides retirement, disability and survivor benefits to California’s nearly 800,000 public school educators from kindergarten through community college.


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