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It's election season in Ohio, and North Canton-based voting machine maker Diebold (NYSE: DBD  ) finds itself once again at the center of controversy. But this time, it has nothing to do with politics.

At least, not electoral politics
Industrial megaconglomerate United Technologies (NYSE: UTX  ) revealed yesterday what certain Diebold directors have known for years: United Tech (UTC) wants to own Diebold, and it's willing to pay a pretty penny for the privilege. In a 6 p.m. Sunday press release, UTC launched a politely worded but unmistakably hostile takeover offer for Diebold. UTC offers to pay $40 per share, plus assumption of debt, to acquire the Ohioan maker of ATMs, safe deposit boxes, and electronic voting machines.

As the press release makes clear, this is not the first time UTC has made the offer. On the contrary, UTC notes that it has been trying to get a meeting with Diebold management for two years now, and that it made a last-ditch attempt to work out a friendly merger between the two last week. But like Take-Two Interactive's (Nasdaq: TTWO  ) brush-off of Electronic Arts (Nasdaq: ERTS  ) last week, or Yahoo!'s (Nasdaq: YHOO  ) recent dissing of Microsoft (Nasdaq: MSFT  ) , Diebold was having none of it, so UTC decided to go public with its offer.

Why not?
Excellent question. My guess is that Diebold thinks it's worth a bit more than what UTC wants to ante up. I'm not so sure it is. Diebold hasn't filed a 10-Q report since last May, so it's tricky to value the company. But based on its last-filed report, Diebold is capable of generating close to $150 million in annual free cash flow. So, pre-takeover bid, Diebold was trading for less than 11 times its likely FCF. Rival NCR (NYSE: NCR  ) fetches around 14 times FCF and is expected to grow no more quickly than Diebold. To me, this suggests that Diebold was cheap when the markets closed on Friday and that UTC is offering an entirely fair price today.

Foolish takeaway
That brings us to the question facing Diebold investors today: Should you take UTC's money and run? I would. The price is objectively fair, and it's 60% more than the shares were worth on Friday. But over at Motley Fool Inside Value, lead analyst Philip Durell may have a different view. He recommended that our members buy Diebold way back in December 2005 -- around about the time UTC started talking takeover. Hmm ..

At last report, Philip thought Diebold was worth a bit more than UTC is now offering. Want to know how much more? Take a free trial of Inside Value and find out. Philip also likes Microsoft.

Fool contributor Rich Smith does not own shares of any company named above. Take-Two is a Rule Breakers pick. Electronic Arts is a Stock Advisor selection. Yahoo! is a former Stock Advisor pick. The Motley Fool's disclosure policy is above ground, and totally above-board.

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