The future of FLS Aerospace, including the former TEAM Aer Lingus operation in Dublin, was in doubt again yesterday when controlling shareholder Potagua announced that it might be the subject of a €540 million bid.
Danish group FLS Industries indicated earlier this year that it wanted to sell off its aerospace division, which employs 1,500 people in Dublin, along with its environment equipment unit, FLS Miljo, to curb continuing losses.
However, Potagua, which holds 46 per cent of FLS and 63 per cent of the voting rights, has informed the Danish stock exchange that it has been approached by a consortium interested in buying both it and FLS Industries.
FLS chairman Mr Jörgen Worning said the approach by the international consortium had come as a surprise. Potagua stated at the end of 2001 that it was interested in disposing of its interest in FLS Industries.
Mr Jens Münter, chairman of Potagua, said it wanted to meet the potential bidders shortly, although he would not disclose the identity of the five participants. The consortium has indicated that it might pay €538.7 million for FLS Industries and €269.3 million for Potagua, dependent on a study of FLS's strategy, financial situation and assets. Any eventual deal could involve a mix of cash and shares.
That would be a substantial premium to the current share prices of both companies, but analysts said an FLS bid might well trigger rival offers. "There is no doubt that, valuing the assets of the company, FLS is worth more than the anticipated," said Mr Michel Nielsen, an analyst at Danish Jyske Bank.
Shares in both companies raced ahead yesterday on Copenhagen Stock Exchange.
A spokeswoman for FLS Aerospace said the bid speculation would not affect ongoing efforts by FLS Industries to sell its aerospace business, including the Irish operation bought from Aer Lingus five years ago. It services aircraft for Aer Lingus, Ryanair and EasyJet.
"Any bid could be a long time coming and we just have to get on with what we are doing," she said.
FLS has struggled for profitability in recent years and said last month that it would be reporting a pre-tax loss of between DKr200 and DKr250 million this year.
If successful in its attempts to sell the air maintenance and environmental units, FLS would retain profitable core divisions in cement works and building materials.
This sparked analyst speculation that one or more of Europe's large cement groups could be involved in the consortium.
