September 13, 2012 / 8:50 AM / 5 years ago

EADS/BAE special share to block hostile offer-source

FRANKFURT, Sept 13 (Reuters) - The special shares that France, Germany and Great Britain stand to receive under the planned merger of BAE Systems and EADS will carry no other rights beyond the ability to block a hostile takeover, a source close to the transaction said.

“These special shares will have no other veto rights and no nomination rights”, the person said on Thursday.

BAE Systems and EADS said on Wednesday they were in advanced talks to create an industry giant that would overtake rival Boeing in sales and contend with defence cutbacks in Europe and the United States.

“There will be a completely normal governance”, the source said, adding that according to the plans - which may be finalized within the next two weeks - no government will get a board seat.

However, the size of stakes held by individual shareholders would be limited, the source said.

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