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Last Updated: Tuesday, 2 May 2006, 15:28 GMT 16:28 UK
BAE mulls speeding up Airbus sale
A350
Airbus is battling rival Boeing to be the biggest commercial planemaker
BAE Systems has said it may call for an independent valuation of its 20% stake in aeroplane firm Airbus unless a sale price can be agreed with partner EADS.

Defence firm BAE has been in talks with EADS, which owns 80% of Airbus, for three weeks and has said they have until the end of May to reach a deal.

Should they fail to do so, then BAE could exercise a "put" option, allowing it have the stake valued and then sold.

The Airbus stake is worth close to 3bn ($5.3bn), analysts have said.

A "put" option gives a party the right to sell something to a second party, often within a certain period of time.

Trigger point

The "put" option is part of a shareholders agreement which was drawn up in 2001.

Under the terms of the deal, BAE can call in independent negotiators - in this case one merchant bank that has been chosen by BAE and EADS - to agree on a sale price for the Airbus stake.

A spokesman for BAE said that the agreement ensured that the stake could be sold in a timely manner.

AIRBUS KEY FACTS
The first ever Airbus, an A300, took off in October 1974
British Aerospace joined the consortium in 1979
There are over 3,900 Airbus jets in service
Airbus employs a total of 55,000 staff Worldwide
Airbus turnover in 2005 was 15.3bn

Some reports have suggested that BAE is asking too high a price, while EADS is looking to pay too little.

Both companies said that this was normal in negotiations, and reiterated that they were committed to finding a compromise.

"We are willing to pay a fair price," said Tome Enders, co-chief executive of EADS.

Analysts said that BAE may be looking to invest more money in its fast-growing US operations, where it produces 35% of its sales.

BAE said that it was looking to maximise its investment in Airbus in the best interests of shareholders.

Despite a bumper year for Airbus sales in 2005, profits at BAE's commercial aerospace division fell to 179m from 201m a year earlier.

BAE's move towards concentrating on its defence operations was reflected by last year's acquisition of US firm United Defense for 2.1bn.


SEE ALSO:
BAE confirms possible Airbus sale
07 Apr 06 |  Business
BAE Systems to sell Airbus stake
06 Apr 06 |  Business
Airbus helps lift profits at BAE
23 Feb 06 |  Business
BAE sells Prestwick unit for 80m
31 Jan 06 |  Scotland


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