Reuters: Hot Stocks: UPDATE 2-EADS shareholders back sweeping ownership change

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UPDATE 2-EADS shareholders back sweeping ownership change Mar 27th 2013, 13:03 Wed Mar 27, 2013 9:03am EDT * Shareholders approve maximum buyback of 15 pct of shares * Would be worth 5.1 billion euros at current prices * CEO wouldn't make buyback worth more than 1/3 of net cash * Spain may sell 1.15 pct of EADS by April 9 * EADS shares down 3 percent (Recasts after vote) By Tim Hepher AMSTERDAM, March 27 (Reuters) - Shareholders have backed sweeping changes at aerospace group EADS, tearing up a Franco-German ownership pact in favour of rules its leaders hailed as "emancipation" from political interference. Shareholders in the Airbus parent also approved a maximum buyback of 15 percent of the group's shares, worth 5.1 billion euros ($6.6 billion) at current prices, but Chief Executive Tom Enders indicated he would not make use of the entire allocation after recent price gains. "Good luck to you, Tom, you are in the driver's seat - not an easy task, but so far so good," outgoing chairman Arnaud Lagardere told Enders from the platform after shareholders on Wednesday backed the biggest shake-up since EADS was founded in 2000. Created from a merger of French, German and Spanish assets with strict controls on management independence, Boeing Co rival EADS has been seen as a stage for Franco-German industrial tensions at various points, most notably when the A380 superjumbo went over budget. Enders said the new rules would limit government involvement to the role of regulator or customer, handing management independence despite the fact that core government stakes are rising to 28 percent from 20 percent to help unravel the pact. Changes include a majority-independent board to be led by former Thales CEO Denis Ranque. Lagardere paid tribute to his father, the late French industrialist Jean-Luc Lagardere, as well as the leaders of German carmaker Daimler who jointly formed Europe's largest aerospace company and secured Franco-German support. He also lavished praise on Enders, who he said would be given "the keys of this huge company" through the transition. CORE BUSINESSES Both the Lagardere media group and Daimler are withdrawing from EADS to focus on core businesses, with the German government picking up part of Daimler's stake to preserve Franco-German balance in EADS. Enders pledged to prevent the buyback penalizing future growth, capital investment or a dividend policy which he said would be significantly more attractive than in the past. The aerospace group left open its options on how to implement the buyback, whose potential value has risen sharply since it was first announced in December, igniting a 39 percent rally in the share price since the start of this year. But following recent price gains, Enders said he would not launch a buyback worth more than a third of its net cash, suggesting an operation worth some 1 billion euros less than the full allowance. EADS had net cash of 12.29 billion euros at the end of 2012. France and Germany will hold core stakes of 12 percent each in EADS, with Spain at 4 percent. A special non-voting foundation has been set up to hold any surplus government shares to avoid crossing the 30 percent threshold for a mandatory bid under Dutch law. But EADS shares fell 3 percent after the company said Spain would take advantage of the changes to sell most of its surplus, or 1.15 percent of EADS, more quickly than expected in a move likely to raise around 400 million euros. The sale could be carried out by April 9, it said. The changes approved at the Amsterdam shareholder meeting will take effect once the transition is completed, probably on April 2. ($1 = 0.7777 euros) (Editing by James Regan and David Holmes) Link this Share this Digg this Email Reprints

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