PARIS (dpa-AFX) - French aerospace supplier Safran SA (SAF.PA, 0IU8.L, SAFRF.PK) on Wednesday said it cut its offer price for Zodiac Aerospace SA about 15% to 25 euros per share after reevaluating the seat manufacturer's worth in the wake of two profit warnings.
Safran will now pay 25 euros per share for Zodiac, 15 percent less than the 29.47 euros specified in an original deal in January. Including Zodiac debt that has increased in intervening months, the overall value of the deal is about 10 percent lower at 8.7 billion euros.
The deal quickly drew fire from hedge fund TCI Fund Management, which had said Safran was overpaying. TCI urged Safran to abandon the deal and attacked the complicated transaction that it said gave preferential treatment to the Zodiac's family shareholders and two institutional investors in the company.
Safran said in March that it was reviewing its offer after Zodiac issued a profit warning amid new problems in its seat-building business.
Safran also adjusted other elements of the complex deal.
The new structure offers an alternative to the cash offer for some Zodiac shares. Safran is offering preferred shares in exchange for Zodiac stock in a structure with an implied value of around EUR24 for each Zodiac share. This component is capped at 31.4% of Zodiac's total outstanding the stock. The preferred shares carry the same rights as ordinary shares but have to be held for at least three years after the completion of the tender offer.
The deal's completion is in part contingent on 50% of Zodiac shares with voting rights being tendered.
Safran also now plans to pay out 2.3 billion euros to investors via a share buyback program spanning two years after the takeover is complete, rather than as a special dividend.
Copyright RTT News/dpa-AFX