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UPDATE 1-Dassault Aviation proposes 10 pct share buyback
September 3, 2014 / 2:40 PM / 3 years ago

UPDATE 1-Dassault Aviation proposes 10 pct share buyback

(Adds details, analyst comment, share price)

PARIS, Sept 3 (Reuters) - Dassault Aviation plans to request shareholder permission to buy back up to 10 percent of its stock, a move that could tighten the Dassault family’s control and offer its second largest shareholder, Airbus , a partial exit.

The resolution on the voting agenda for the Rafale jet fighter maker’s Sept. 24 annual meeting envisages paying up to 1,200 euros per share and spending up to 1.215 billion euros ($1.60 billion) on the buyback.

Dassault said it was keeping its options open on what it would do with the stock. Options include cancelling the shares to improve the value of the remainder, and selling them back on to the market to improve liquidity.

Dassault Aviation is 50.55 percent owned by the Dassault family. Its shares stood at 1,076 euros each on Wednesday, up 1.9 percent.

Airbus, which holds 46.3 percent of Dassault Aviation, signalled on July 30 it was gearing up to sell its holding.

Dassault Aviation said in its agenda document that the purchase could be done in a number of ways - including on the market or via the purchase of a block of shares.

A 1.2 billion euros cash inflow for Airbus would give it more financial flexibility and may in turn allow the commercial aircraft giant to modestly step up its own buyback, according to a research note from RBC analyst Robert Stallard.

“However, Airbus still has considerable development commitments on the A350, the A320 NEO and the A330 NEO, so we don’t expect them to do anything too aggressive with the cash given these other risks,” he wrote.

1 US dollar = 0.7609 euro Reporting by Andrew Callus; editing by John Irish

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