Accounting Delays Could Kill This Takeover

Article Excerpt

DIEBOLD INC. $33 (New York symbol DBD; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 65.8 million; Market cap: $2.2 billion; WSSF Rating: Average) is currently restating its financial statements to adjust for a change in the way it recognized revenue from certain sales of automated teller machines (ATMs). The company now aims to soon file its updated results for 2007 and the first two quarters of 2008. The stock continues to trade below the $40.00-a-share takeover offer from UNITED TECHNOLOGIES CORP. $60 (New York symbol UTX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 964.4 million; Market cap: $57.9 billion; WSSF Rating: Above average). Diebold has rejected the offer as too low, but its accounting problems make it difficult for United Technologies to increase its offer. Diebold continues to win new ATM orders, and bringing its financial statements up to date will cut its risk. However, further delays could prompt United Technologies to drop its takeover bid. That could…