EADS Board Approves $4.8 Billion Buyback, Names Ranque Chairman
European Aeronautic, Defence & Space Co.’s new board appointed Denis Ranque as chairman and backed a 3.75 billion-euro ($4.8 billion) stock buyback to support its share price during an ownership transition.
Ranque, the 61-year-old former chief executive officer of French avionics supplier Thales SA (HO), is being elevated to the new role after being appointed to the board of EADS last week.
The purchase of as much as 15 percent of stock at a maximum price of 50 euros a share will ease the biggest change to EADS’s corporate structure since its formation in 2000, curbing state influence and allowing founding investors Lagardere SCA (MMB) and Daimler AG (DAI) to exit. The buyback will stretch over 18 months, Toulouse, France-based EADS said in a statement today.
“The share buyback program represents good use of company funds in the interest of EADS and its shareholders and it preserves, at the same time, our strategic flexibility and a sound balance sheet,” Chief Executive Officer Tom Enders said.
Shares will be acquired through private purchases, using derivatives or on the stock exchange, and then canceled, Europe’s largest aerospace company said.
Under the new structure, EADS’s free float will increase, even with the introduction of the German state to replace Daimler. France, which has a 15 percent stake, will see that drop to 12 percent, matching the German holding.
Spain will be allowed to sell 1.15 percent of stock before April 10 to cut its holding to about 4 percent. An initial agreement allowed no disposal until Jan. 1.
Chief Financial Officer Harald Wilhelm told investors at a meeting that appointed the new board on March 27 that EADS would preserve its capital spending ability and future dividends.
John Parker, an incumbent board member, heads the company’s remuneration and nomination committee, with Hermann-Josef Lamberti, the former Deutsche Bank AG chief operating officer, given oversight of the audit committee, today’s statement said.
EADS shares rose 3.6 percent to 41.12 euros in Paris before the announcement. The stock has advanced 39 percent this year, valuing the company at 34 billion euros.
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