(Recasts with BAE Systems comment)
LONDON (AFX) - BAE Systems PLC insisted it has not yet decided whether to pursue a joint acquisition along with VT Group PLC of Babcock International PLC, the engineering group that runs the Rosyth naval dockyard.
'BAE Systems confirms that no decision has been made and it continues to explore the possibility of an offer for Babcock with VT as one potential route to achieve a restructuring of the UK maritime sector,' it said in a statement.
'No approach has been made to the board of Babcock to date and BAE Systems wishes to emphasise that there is no certainty any offer will be made.'
The UK Takeover Panel has given BAE and VT until May 18 to formally bid or walk away.
BAE's statement was made after a report in The Sunday Times said the group is preparing to shelve the 700 mln stg deal.
Citing senior sources at BAE the newspaper said the soaring price of Babcock had blunted the company's appetite for a three-way deal that would have brought together the shipbuilding operations of BAE, Babcock and VT.
It noted Babcock shares closed Friday at 320 pence, up nearly a third over the past month and cited the sources as fearing a strong set of full year results on Wednesday from Babcock could send its share price higher still.
According to the newspaper the BAE sources said the company did not need to pay a top price and has 'other options'. newsdesk@afxnews.com jdd/bam/jdd/bam COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited