Zodiac Jumps as Safran Said to Plan Bid for Plane-Seat MakerBy and
French report says engine firm may lodge 10-billion euro offer
Bloomberg said in April that approach was being readied
Safran may offer 30 to 35 euros a share for Zodiac, valuing the business at as much as 10 billion euros ($11.2 billion), La Lettre de l’Expansion reported Wednesday, without saying where it got the information. Reuters said separately that the story is incorrect, citing an unidentified person, while Zodiac told Bloomberg no bid has been received.
The report of Safran’s renewed interest in Zodiac came after the biggest supplier of seats to Airbus Group SE said a logjam in the production of premium berths for the manufacturer’s latest A350 model is beginning to ease, sending its stock up as much as 13 percent in early trading.
Safran, known for its CFM International engines pact with General Electric Co., was considering an offer for Zodiac in April, people familiar with the matter told Bloomberg at the time, adding that the deliberations were at an early stage and that the Paris-based company might decide against a purchase.
Any bid would come 5 1/2 years after Safran dropped an approach for its compatriot, saying conditions weren’t right for a “friendly combination.” Zodiac earlier rejected a combination as unlikely to deliver sufficient savings.
Zodiac CEO Olivier Zarrouati said in an earnings briefing late Tuesday that no takeover proposals had been received in the previous three months. “The answer is no, to make it clear,” he told analysts, urging “Let’s get to the other questions.” The company said late Wednesday that those comments still stood.
Zodiac, which has struggled to meet Airbus and Boeing Co. delivery schedules for two years after taking on too much work, has achieved certification of a new business-class seat being built for the wide-body jet, allowing it to restart shipments, it said in the earnings update.
At the same time, the Plaisir, France-based company has made progress in the redesign and production of seat shells at its plant in Santa Maria, California, and selected three new suppliers to help smooth future operations. Zodiac also stuck to its guidance for operating profit, following a string of eight earnings revisions in the current the fiscal year, which ends in August.
Zodiac shares rose almost 27 percent before closing 12 percent higher at 21.28 euros in Paris, valuing the company at 6.17 billion euros.
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