PARIS Airbus parent EADS EAD.PA denied a report on Monday that it had bid for 21 percent of Thales, but industry sources said its denial suggested it had taken some part in recent maneuvers around Europe's largest defense electronics company.
Speculation that telecoms equipment company Alcatel-Lucent ALUA.PA might sell the Thales stake has grown since September, when it appointed a new chairman, a veteran of past battles over Thales (TCFP.PA).
French news agency AFP, citing a source close to the matter, said EADS had offered 44 euros a share or 1.8 billion euros for the stake in early October, shortly before warplane maker Dassault Aviation (AVMD.PA) said it too was interested.
"We have not transmitted any binding offer to Alcatel-Lucent," an EADS EAD.PA spokeswoman said.
"There is no offer from EADS for these shares today," she said. She declined to comment on whether EADS had made any form of approach in the past, something that would revive EADS's previously unsuccessful attempts to buy a stake.
Thales shares rose as much as 9.1 percent to 34.4 euros.
The shares, which began the month at 35.76 euros, closed up 0.2 percent at 31.56 euros, valuing Thales at 6.3 billion euros.
Warplane maker Dassault Aviation said on October 14 it would study buying Alcatel's shareholding in Thales if it came up for sale and could buy another 5 percent of Thales owned by family holding firm Marcel Dassault Industries.
Alcatel-Lucent, the world's largest maker of fixed-line telecoms equipment, said the next day it would weigh options.
A French defense industry source, asking not to be named because of the sensitivity of the matter, said the carefully worded EADS denial indicated an informal move had been made before the peak of the banking crisis but was now dormant.
Two industry sources said there were few signs matters had gone very far, with Thales stock mired below the price at which Alcatel invested. However, the move leaves the door ajar to a possible French defense shake-up if and when markets stabilize.
Shares in Thales, then known as Thomson-CSF, were worth 36 euros on the day it was privatized in July 1998, with Alcatel and the Dassault family as core shareholders. In 1999, Alcatel boosted its stake to 25.3 percent by buying stock at 36 euros.
In 2002, it sharply reduced its stake by selling stock for 30.5 euros a share under pressure from rating agencies and banks following the dot-com collapse.
In pushed its stake back above 20 percent shortly after the Lucent merger in exchange for space assets.
Any changes in Thales capital must be approved by the French government, which has 27 percent and a special veto.
The capital structure of radar maker Thales has already produced some of the fiercest and most political disputes in France's close-knit but bickering defense industry.
EADS is backed by the Lagardere media family, which lost out to Alcatel in a battle to take Thomson-CSF into the private sector in 1998, when Lagardere was more deeply involved in aerospace.
Philippe Camus, a close lieutenant of the late missiles tycoon Jean-Luc Lagardere, took up the cudgels for control of Thales once again after he became co-chief executive of EADS.
He made an informal takeover approach in 2004 but was defeated when Thales Chairman and CEO Denis Ranque lobbied for support from several quarters including the British government, worried over the future of its no.2 defense supplier Thales.
This time Camus is on the opposite side of the fence as the new non-executive chairman of Alcatel-Lucent, the transatlantic group formed by a merger of French and U.S. companies in 2006.
However, he maintains a foothold in EADS as a partner of media group Lagardere, a core industrial shareholder that owns 10 percent of EADS. EADS in turn owns 46 percent of Dassault.
EADS and Alcatel compete in building satellites.
EADS is keen to expand its defense activities as its plane making subsidiary Airbus is hit by tough times for airlines, and Dassault wants to acquire access to new defense projects after its Rafale warplane has failed to find export markets, analysts say.
Dassault and Thales co-operate on military drones.
Thales supplies military and civil avionics equipment, radars and navigational aids to both Dassault and EADS.
(Additional reporting by Matt Gil, Matthias Blamont; Editing by David Cowell)