Press: BAE wants details on Airbus problems

5th Jul 2006

BAE Systems Plc wants more details about the extent of Airbus’ industrial woes before recommending to its shareholders whether to accept the GBP1.9 billion sale of its 20% stake in the aircraft maker, the Financial Times reported on its Web site Tuesday. Last month, the U.K. defense company exercised a put option to sell the stake to the European Aeronautic Defence and Space Co. (5730.FR), which owns the rest of Airbus.

But BAE and EADS failed to agree to a price and appointed investment bank Rothschild to determine a fair value. Institutional investors were said to have been unhappy at the much lower-than-expected price Rothschild had set, FT reported, adding that they might still approve of the sale if convinced it reflects Airbus’ true medium-term value.

While BAE management believes it is unlikely that Rothschild’s valuation is wrong, they want to make sure they have seen the same data, FT reported.


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