Eaton recommends shareholders not accept mini-tender offer



CLEVELAND ... Diversified industrial manufacturer Eaton Corporation (NYSE:ETN) today strongly recommended that no shareholder should accept TRC Capital Corporation's mini-tender offer to purchase up to 1.5 million shares of Eaton's outstanding common stock (about one percent of Eaton's outstanding shares) at an offer price of $60.60 per share. Eaton, its officers and directors are in no way associated with TRC or its offer or offer documents.

Eaton was notified on August 31 that TRC has commenced a tender offer at a price lower than Eaton's closing price on August 30 of $63.25. The offer is also less than Eaton's closing price on Sept. 6 of $64.75. TRC's offer states that it can be withdrawn at any time if there is a decrease in the market price of Eaton common shares.

The Securities and Exchange Commission (SEC) has said that mini-tender offers "have been increasingly used to catch investors off guard" and that investors "may end up selling their securities at below-market prices." The combination of TRC's current below-market offer price and TRC's right to withdraw the offer if the market price of Eaton common shares declines enhances the risk that TRC will purchase shares only if, at the time of purchase, TRC's offer price is below market. TRC has made dozens of below-market tender offers in the past several years. By seeking less than five percent of outstanding shares, TRC avoids many of the disclosure and other regulatory requirements of the SEC.

The SEC has issued an investor alert regarding mini-tender offers that can be accessed at the SEC's Web site at

The Ontario Securities Commission and Canadian Securities Administrators issued a similar investor alert at

Shareholders with questions about this mini-tender offer or who are considering selling their Eaton shares to TRC should consult with their investment advisers prior to making any decisions.

Eaton would like to make broker-dealers and other market participants who may disseminate the offer aware of (1) the SEC's recommendations to broker-dealers at, and (2) New York Stock Exchange Information Memo Number 01-27 issued September 28, 2001 regarding the dissemination of mini-tender offer materials at the "Information for Market Professionals - Information Memos" tab at Eaton requests that a copy of this press release be included with all distributions of information relating to TRC's mini-tender offer.

Eaton Corporation is a diversified industrial manufacturer with 2004 sales of $9.8 billion. Eaton is a global leader in electrical systems and components for power quality, distribution and control; fluid power systems and services for industrial, mobile and aircraft equipment; intelligent truck drivetrain systems for safety and fuel economy; and automotive engine air management systems, powertrain solutions and specialty controls for performance, fuel economy and safety. Eaton has 57,000 employees and sells products to customers in more than 125 countries.


Contact Information

William Hartman, vice president, Investor Relations

Gary Klasen, director, Media Relations