Latecoere to examine Searchlight's $414 mln bid offer (updated)

Latecoere SA

01/07/2019 06:59

* Searchlight offered 3.85 euros per share 
    * Latecoere to study takeover offer
    * Latecoere shares trade just below Searchlight's price
    * Searchlight already owns 26% in the French company

 (Adds share price reaction and investor's comment)
    By Sudip Kar-Gupta
    PARIS, July 1 (Reuters) - French aeronautics company
Latecoere  LAEP.PA  said it would examine a 365 million euros
($414 million) takeover offer from investment firm Searchlight
Capital.
    Searchlight, which already owns 26% of Latecoere's share
capital, made an offer of 3.85 euros per share on June 28,
marking a premium of 34% to Latecoere's closing price on Friday.
    Latecoere shares rose 32% to 3.79 euros in early trading on
Monday, just below Searchlight's offer price.
    Latecoere said it would appoint an independent expert and
consult employees' representative bodies to examine the offer.
    "The board of directors of the company will issue its
reasoned opinion after the issuance of the report of the
independent expert and the opinion of the employees'
representative bodies," Latecoere added on Monday.
    One minority shareholder - Sterling Strategic Value which
says it has a 3.48% stake in Latecoere - said Searchlight's
offer was not good enough and that Latecoere should consider any
other offers coming its way.
    "We believe that the price offered does not reflect the
opportunities for Latecoere from continued growth in the global
aerospace market (particularly given the company’s leading
market positions in aircraft doors and interconnection systems)
and potential operational improvements within the firm,"
Sterling Strategic Value said.
    In April, activist fund Searchlight - whose main offices are
in New York, London and Toronto - bought an initial 26% stake in
Latecoere, in the latest example of activist funds targeting
companies which they feel could perform better.
    Activist investors have been snapping up stakes in companies
they feel are underperforming in a volatile economic
environment, pushing for changes in strategy to extract more
value for shareholders.
    In France, activist hedge fund Elliott has been piling
pressure on drinks group Pernod  PERP.PA , while Amber Capital
has acquired a stake in media company Lagardere  LAGA.PA . 
    Latecoere shares slumped by around 50% in 2018, and the
company had to cut its earnings outlook in December due to the
impact of costs related to restructuring and starting-up new
production units.  urn:newsml:reuters.com:*:nL8N1YA51F 
    Latecoere is one of France's historic aviation and aerospace
companies. It was founded by Pierre-Georges Latecoere in 1917
and is a partner to companies such as Airbus  AIR.PA , Dassault
Aviation  AVMD.PA  and Boeing  BA.N .
    ($1 = 0.8824 euros)

 (Reporting by Sudip Kar-Gupta; editing by Sherry Jacob-Phillips
and Jason Neely)
 ((sudip.kargupta@thomsonreuters.com; +33 1 49 49 54 52;))