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Last Rumor was Safran
24/04/2016
Safran SA is considering an offer for Zodiac Aerospace SA that would unite two French companies that rank among Europe’s biggest aerospace suppliers, people familiar with the matter said.
Deliberations are still at an early stage, and Safran could decide against a bid, said the people, who asked not to be named because the plans are private.
Shares of Zodiac surged 11 percent Friday, the most in 13 years, spurring the aircraft interiors specialist’s market value to 6.1 billion euros ($6.9 billion). Safran, best known for its CFM International engines pact with General Electric Co., is worth about 25 billion euros.
A spokeswoman for Safran declined to comment, while a representative of Zodiac referred to Chief Executive Officer Olivier Guy Zarrouati’s comments in a radio interview this week where he said the group isn’t for sale.
A bid would come more than five years after Safran dropped an offer for its compatriot. Zodiac, a world leader in the manufacture of aircraft seats, has cut earnings forecasts eight times in the past six months as it struggles to meet delivery schedules after taking on more work than it was capable of handling.
Detection Disposal
CEO Zarrouati, when asked on a conference call in March about a possible bid, said the company would be receptive to a “reasonable” offer.
Shares of Plaisir-based Zodiac closed 2.12 euros higher at 21.2 euros in Paris for their biggest daily gain since April 3, 2003. The stock had already begun to recover from the earnings scares, gaining 32 percent before today since a February profit warning caused it to fall the most in 17 years.
The company said Wednesday that it’s targeting improved earnings in the second half, adding that it had already made provision for fixes to required on some U.S. airline seats found to pose a safety risk.
Safran, whose engines power the 737 and A320 series narrow-body jets from Boeing Co. and Airbus Group SE, closed down 3 percent at 60.79 euros in the French capital, where the company is based.
Safran agreed Thursday to sell its explosives-detection arm to Smiths Group Plc in a deal valued at $710 million. CEO Philippe Petitcolin said in a statement that the disposal stems from the company’s plans to focus more on its core aerospace and defense markets.