Spirit AeroSystems shares up 7 percent amid report of possible bid
July 25 (Reuters) - Shares of Spirit AeroSystems, a supplier to Boeing Co and other jet makers, rose 7 percent on Thursday after a British newspaper reported that car and plane parts maker GKN may launch a bid for the company.
The Daily Mail said speculation about a bid ramped up on Wednesday with dealers hearing GKN could launch "a $5 billion cash and shares bid, worth around $35 a share," for Spirit, which makes fuselages and wing parts.
The newspaper said Bank of America/Merrill Lynch was reported to be advising GKN.
Ken Evans, a spokesman for Kansas-based Spirit, said the company would not speculate on rumors. He added that it had no announcement at this time.
Spirit named former Lockheed Martin executive Larry Lawson as president and chief executive earlier this year and is undertaking a review of its operations. It has recorded charges in past quarters tied to cost overruns on certain aircraft programs.
"If this report turns out to be true, then we think that it offers an excellent deal for Spirit's shareholders," RBC Capital Markets analyst Robert Stallard said in a note to clients on Thursday.
"Given the lack of profitability on its development programs, and a lack of cash generation, a bid at the reported level would seem extremely generous given the current situation," Stallard added.
Jefferies analyst Sandy Morris expressed doubts about a GKN acquisition of Spirit. "My personal view is that perhaps one division of Spirit may be for sale, and that would be the wing systems division. I think that that's much more likely," Morris added.
Spirit, spun off from Boeing a few years ago, is expected to lay off about 300 people on Thursday, a union leader said .
Shares of Spirit were up 7.1 percent, or $1.72, to $25.80 in morning trading. Earlier, the shares traded above their 52-week high of $25.86.
(Reporting by Karen Jacobs in Atlanta and Brenda Goh in London; Editing by John Wallace)
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