Latecoere says draws interest from bidders

PARIS Tue Mar 22, 2011 3:22pm EDT

PARIS (Reuters) - Latecoere (LAEP.PA) has drawn interest from several potential buyers for its business and expects talks to intensify, the French aerospace company said as it showed a return to profit last year and forecast growth.

Earlier on Tuesday, sources familiar with the situation told Reuters the company was mulling three competing takeover bids -- from Britain's GKN (GKN.L), Chinese state aviation company AVIC and Fokker-Stork of the Netherlands -- boosting its shares by as much as 14.6 percent to a near-three year high.

The sources confirmed a report in French newspaper Le Figaro.

"In a first exploratory phase, the group has received several expressions of interest which it expects to deepen in the coming months," Latecoere said in its earnings statement, adding it had no more comments to make at this stage.

The company, which makes passenger doors for Airbus EAD.PA and Boeing (BA.N) and had nearly 351 million euros ($498.7 million) in net debt at the end of 2010, is looking for a buyer.

Founded in 1917, Latecoere was associated with the earliest days of French aviation and began by producing boat planes.

Its future is a sensitive issue in southwestern France, where it employs some 3,000 workers, but a recovery in civil aerospace means the impact of the probable foreign takeover on jobs is likely to be relatively muted, analysts say.

"A takeover from a French buyer would be the favored scenario but Latecoere is trying to speed up the process," a Paris-based analyst said.

"The company is vulnerable to any takeover bid and is looking for a partner; however, any operation will need the green light of prime client Airbus," the analyst added.

The company swung to a net profit of 29.9 million euros last year from a loss of 91.2 million in 2009 on sales already reported of 464.4 million euros.

Based on its order book and looking ahead, Latecoere said it expected sales to grow by about a fifth this year and its operating margin to widen to more than 7 percent and to 8 percent in 2012 from 5.9 percent in 2010.

Net debt should remain little changed this year and drop 50 million euros in 2012, it said.

About 20 percent of Latecoere's capital is owned by a trio of investment funds, with 15 percent held by staff and the rest freely traded, according to the company's website.

Latecoere shares closed 8.5 percent higher at 9.69 euros.

($1=.7049 euros) (Reporting by Matthias Blamont, additional reporting by Caroline Jacobs, Editing by Bernard Orr)

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