LONDON Dec 6 An accord at EADS won't
end state meddling or bring in new investors who have so far
avoided the aerospace group for its political risks, some of its
independent investors said on Thursday.
They said the deal, which winds down a Franco-German power
sharing accord and will increase the company's "free float" of
readily tradeable shares, will not take EADS off the political
"EADS will always suffer from political interference just as
Boeing and the other big U.S. aerospace companies do,"
said Neil Dwane, investment chief at Allianz Global Investors,
one of the 20 largest investors in the company.
Shares in the Airbus maker rose by as much as 9 percent to
29.6 euros on Thursday, amid hopes a ceasefire between warring
stakeholders could put the company in a better position to
pursue flagship projects along commercial, not political, lines.
France may prove particularly loathe to give up its
influence on EADS.
"Even if the government has less direct influence on the
company at the board level, ultimately this is still France
where you do get interference regardless," one London-based
"That's a discount that gets put on quite a few French
businesses, to be honest. The influence might be significantly
reduced but it's not gone entirely."
A revamped governance structure at the group will involve
the appointment of a new chairman heading a mainly independent
board and a gradual exit by core industrial shareholders that
represented French and German interests.
"Anything which makes the company operate like a normal
company, increases its free float and enhances the ability to
leverage off their Airbus positioning, is positive," said Greg
Bennett, a fund manager at Argonaut Capital Partners, which
holds EADS shares.
German carmarker Daimler raised over $2 billion
from offloading part of its stake on Thursday. It maintains 7.5
percent of EADS for the time being, matching a stake held by
Lagardere, but both will be free to exit in 2013.
France and Germany have agreed to control 12 percent each of
the voting rights, while Spain will hold 4 percent. Powers of
veto held by France on matters such as board appointments have
But brokers in France who had hoped the deal would prompt
new investors to take an interest in EADS were still
encountering "pushback" from institutions worried about
political risks, the first shareholder said.
Though governments will no longer exert direct influence
over the board, it would be naive to believe a rush of new
investors would buy stakes having held back in the past because
of the threat of political interference, some shareholders said.
"Obviously the best case would be there is no government
shares ... but that is wishful thinking and you need to be
realistic about what's achievable," said a second shareholder,
speaking anonymously in line with his fund's policy. "This
outcome is the best case out of what it was realistic to
However, there were signs that former shareholders at ease
with the company's political risks are turning back to EADS.
A third investor, who exited the stock when an ill-fated
$45 billion merger plan with BAE Systems was first
mooted in September, told Reuters he had started to rebuild his
He said he had been encouraged both by the deal and by
reassurances that takeover plans were on ice at least until
after a strategic review in mid-2013.
While unlikely to eliminate government interference
entirely, investors said the new ownership set-up gave CEO Tom
Enders greater powers to take decisions on where to cut costs or
reallocate capital without fear of reprisal.
"The company has been executing very well lately but there's
a lot to be done still," the second shareholder said. "They
committed to buy back 15 percent of the shares next year and
also to a very sustainable payout policy.
"Those are very good measures ... Now they just need to do a
lot of hard work."