Shareholders haggle over final details of EADS shake up

Tue Dec 4, 2012 8:01am EST
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By Tim Hepher

LONDON (Reuters) - Bankers, civil servants and industrialists were squeezing out final concessions in talks to shake up aerospace group EADS on Tuesday, people familiar with the discussions said.

Attention focused on transactions needed to allow the Berlin government to take a stake in the Airbus parent, which are especially complex between German partners. But barring surprise changes, the main political lines appeared to have been decided.

EADS shares EAD.PA rose over two percent for a second day on hopes of a simpler structure for Europe's largest aerospace group, which has been controlled by a maze of French and German public and private interests since it was created in 2000.

"The negotiations about a new shareholder structure are making good progress," a spokesman for Germany's economics ministry said.

"But there are still important details open, so the participants are still aiming to find a solution as soon as possible."

The deal is expected to bring Germany on board as a direct shareholder for the first time, while allowing proxy industrial shareholders -- French media firm Lagardere (LAGA.PA: Quote) and Germany carmaker Daimler (DAIGn.DE: Quote) -- to sell their stakes.

Analysts say that although state shareholdings will rise as Germany takes a seat alongside France and Spain, the risk of meddling will be reduced as industrial proxy shareholders in France and Germany withdraw and state veto powers are curbed.

With 8 billion euros of net cash on its balance sheet, the company is poised to launch a share buyback if needed to prop up share prices as industrial partners exit, but a source close to the talks said no decision had yet been taken.   Continued...

Visitors talk near the welcome desk of the EADS booth at the ILA Berlin Air Show in Selchow near Schoenefeld south of Berlin on September 13, 2012. REUTERS/Tobias Schwarz