France’s Safran could lower bid, restructure Zodiac

PARIS: France’s Safran is exploring plans to lower its $9 billion bid for Zodiac Aerospace and may simplify its structure amid continued turmoil at the seats maker and pressure from its own shareholders, a financial source said.

A new structure could involve a mixture of cash and shares in a more traditional offer for Zodiac, rather than a complex two-tier structure designed to woo family shareholders.

But an increasingly wary Safran is unwilling to take any decisions on a range of options before Zodiac issues its newly delayed first-half results, the source said, asking not to be identified because of the sensitivity of the matter.

Safran, which makes aircraft engines and other aerospace equipment, declined to comment.

Zodiac said it was postponing publication of its first-half financial results by a week to April 28 due to what it described as excess work amid Safran merger talks.

The delay coincides with analyst concerns that Zodiac’s rapid growth through numerous acquisitions has complicated its reporting processes, which in turn make it harder to resolve a two-year industrial crisis in its seats and cabins plants.

Safran faces criticism over the value and structure of its offer from British hedge fund TCI, notably since Zodiac last month issued the latest in a spate of profit warnings, weeks after agreeing to the tie-up.

Safran is unwilling to run the risk that the results delay could coincide with another warning and has given itself a few weeks to decide how to alter its 29.47 euro per share bid. Despite Zodiac’s industrial woes, Safran has so far defended efforts to buy the company and believes it can bring Zodiac’s factories under control due to its own track record.

— Reuters