Delphi Spin-Off Makes for Happy Holiday Weekend
26 May 1999
GM, Delphi Employees and Retirees, Stockholders to Get New Delphi Stock Friday In Company Spinoff; Delphi Debuts as 36th Largest U.S. Company
TROY, Mich., May 26 -- Hold, sell or buy more? This likely
question will be on the minds Friday of investors who hold GM $1-2/3 par value
common stock when GM distributes its remaining shares of Delphi
Automotive Systems to GM stockholders. For every 10 shares of GM
$1-2/3 stock, stockholders will receive a dividend of approximately 7 shares
of Delphi.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990526/NYW023 )
(Photo: http://www.newscom.com/cgi-bin/prnh/19990526/NYW023-b)
GM's distribution of 452,565,000 shares of Delphi stock to GM stockholders
represents the most significant step in establishing Delphi as an independent
company, which would rank as the 36th largest company in the U.S. The initial
separation was announced in August of last year and on February 5 Delphi began
trading on the New York Stock Exchange with an initial public offering of 100
million shares, priced at $17. The stock closed Tuesday at $20.63, down $.31.
The record date to qualify for the dividend was Tuesday, May 25 at 5 p.m. EDT.
"This is the dawning of a new era for Delphi," said J. T. Battenberg III,
Delphi's Chairman, Chief Executive Officer and president. "This is an
exciting prelude to the new century, and I firmly believe that Delphi holds
great value for our stockholders. We expect that our strong brands,
technological strengths, diversified product portfolio and our capable people
position us well to take advantage of new opportunities as an independent
company."
The "ex dividend" date for GM $1-2/3 common stock will be May 28, 1999.
Trading in such stock on that date will adjust the price of that stock
downward to reflect completion of the Delphi spin-off. That adjustment is
expected to be based on the value of the Delphi stock being distributed on
each share of GM $1-2/3 common stock, which at the close of trading on the New
York Stock Exchange (NYSE) Tuesday was approximately $14.42 per share,
reflecting the value of .69893 of a share of Delphi common stock, which closed
on the NYSE Tuesday at $20.63 per share.
Battenberg said that being a separate company, will enable Delphi to grow
its sales to non-GM vehicle manufacturers around the globe.
"We will continue to build on our strengths as a supplier of high-quality,
innovative components, systems and modules, and we want to expand our market
extensively for our technology and products," Battenberg added. "Frankly,
winning business is not new to Delphi. We have been successful in achieving
strong growth with customers beyond GM at more than a 10 percent compound
annual growth rate for the past five years."
Battenberg said that the company intends to leverage its strong global
presence, improve operating performance through lean manufacturing and
employee involvement, and aggressively pursue strategic acquisitions, joint
ventures and alliances.
"I believe that as the corporation grows my investment in Delphi will
appreciate considerably. I am a long-term holder of this stock, " Steve
Shope, a Delphi employee said, "I intend to hold onto it until at least
retirement age, another 17 years from now."
Another Delphi employee, Tom Fessler said, "My wife and I plan on holding
onto our Delphi shares because we view Delphi as a solid growth company. We
bought into the IPO to supplement our portfolio outside our 401K programs and
to utilize it as an investment for our children's college and our future
retirement."
"I think that as Delphi grows, then the stock will be of great value to
me," Ralph Drake, a retiree of GM, said. "We're all going to be nicely
rewarded for holding on to the stock."
Delphi has approximately 565 million shares outstanding. Delphi sales for
1998 were $28.5 billion.
Delphi Automotive Systems, with headquarters in Troy, Michigan, USA, is a
world leader in automotive component and systems technology. Delphi's three
business sectors, Dynamics & Propulsion; Safety, Thermal & Electrical
Architecture; and Electronics & Mobile Communications -- provide comprehensive
product solutions to complex customer needs. Delphi has approximately
196,000 employees and operates 168 wholly owned manufacturing sites,
51 customer centers and sales offices, and 27 technical centers in
36 countries. Regional headquarters are located in Paris, Tokyo and Sao
Paulo. Delphi can be found on the Internet at http://www.delphiauto.com.
Forward-Looking Statements
Delphi is subject to a number of factors that could cause actual results
to differ from those anticipated in forward-looking statements. All
statements contained in this press release that are forward-looking statements
(including the possible benefits that could be achieved from a complete
separation from General Motors) which, in certain instances, are identified by
the words "expect," "anticipate," "estimate," "project," and similar
expressions, are subject to numerous risks and uncertainties, many of which
are outside Delphi's control. Accordingly, actual results may differ
materially from those suggested in these forward-looking statements. Further
information concerning such risks and uncertainties is contained in Delphi's
filings with the U.S. Securities and Exchange Commission, including its Annual
Report on Form 10-K for the year ended December, 31, 1998.