Finmeccanica sees possible rival bid for DRS

Tue May 20, 2008 6:09am BST
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By Tiziana Barghini

MILAN (Reuters) - Italy's Finmeccanica acknowledged on Monday it may face rival suitors for U.S. defence firm DRS Technologies Inc DRS.N, which it agreed to buy for $4 billion last week, but Airbus parent EADS denied it was meeting to draw up a counterbid.

"There's always the chance that someone could decide to step in," Finmeccanica Chief Executive Pierfrancesco Guarguaglini told La Repubblica newspaper in remarks published on Monday.

"It's possible, not so much from an American company but from a European one," he added.

Finmeccanica (SIFI.MI: Quote, Profile, Research) shares rose 0.1 percent to 20.30 euros, while EADS (EAD.PA: Quote, Profile, Research) closed down 0.35 percent at 16.91 euros. The DJ Stoxx index of industrial goods and services was up 0.8 percent.

EADS Chief Executive Louis Gallois last week highlighted possible synergies from a DRS takeover and said the firm remained on EADS' target list, hinting at a possible counterbid as the Franco-German Airbus parent expands in defence.

Analysts say Finmeccanica's move has raised the prospect of EADS being strategically sidelined in the lucrative U.S. defence market despite winning a major order for air refuelling tankers.

However, EADS denied a Reuters report that its top managers were meeting as early as Monday to take a decision on whether to launch a counterbid for DRS.

"There is no executive committee meeting today," an EADS spokeswoman said. She declined to comment further on DRS.  Continued...

 
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