Latecoere SA, the world’s largest independent aircraft-door supplier, is in talks with prospective partners about consolidating operations and aims to make a choice by year-end. The shares jumped as much as 26 percent.
Rising air traffic and demand for new planes means the company is in a better position to secure a partner, Chairman Pierre Gadonneix said today. Latecoere last year restructured debt and cut 20 percent of its workforce to return to profit.
The company, based in Toulouse, France, forecasts growth in sales and earnings as airframe makers including Airbus SAS and Boeing Co. ramp up production. Latecoere has had to wait longer than expected to get a return on 300 million euros ($426 million) of investment into new products over the past five years because of Boeing’s delayed 787 aircraft.
“We’ve had expressions of interest from several parties, and we’re pleased these come from companies with industrial projects in mind,” Gadonneix told journalists in Paris today. “In the coming months, our aim is to explore and identify the project that brings the greatest value.”
Latecoere rose as much as 2.51 euros to 12.2 euros, the biggest one-day gain since September 2009 in Paris trading today. That followed an 8.5 percent rise yesterday, spurred by media reports about potential buyers. Le Figaro reported GKN Plc (GKN), Fokker-Stork of the Netherlands and China’s state-owned AVIC had come forward. The company has yet to get any concrete offers, Gadonneix said, declining to comment on the number and origin of potential partners.
Keen to Merge
European airframe makers are eager to consolidate to get greater economies of scale, Chief Executive Officer Francois Bertrand said. Europe has more than 20 companies making structural parts for commercial aircraft, while in the U.S., the field has been winnowed to just two -- Spirit Aerosystems Holdings Inc. and Triumph Group Inc., which owns Vought Aircraft Industries.
Latecoere isn’t in a position to buy any other companies, yet it could be a takeover target, Gadonneix said.
Latecoere, whose largest customers are Airbus and Brazil’s Embraer SA, gets 56 percent of sales from plane structures. Wiring contributes 32 percent and engineering 12 percent. Sales last year gained 3.3 percent to 464.4 million euros, while operating profit almost tripled to 27.5 million euros.
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