March 24, 2023

EADS Shareholders Back Sweeping Ownership Change

Investors in Europe’s largest aerospace group also on Wednesday approved a maximum buyback of 15 percent of the group’s shares, worth 5.1 billion euros (£4.4 billion) at current prices, but Chief Executive Tom Enders said market conditions would set the actual amount.

Created from a merger of French, German and Spanish assets with a tight rein on strategy, Europe’s answer to Boeing has often been swept up in Franco-German industrial tensions, most notably when A380 superjumbo delays led to job cuts.

Although the simplified structure and a new board have been welcomed following a decade in which EADS served as lightning rod for squabbles over industrial policy, shares in the group fell more than 3 percent as Spain moved to sell part of its stake sooner than expected.

“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 backed the biggest shake-up since EADS was founded in 2000.

Enders said the new rules would limit government involvement to the roles of regulator or customer, giving EADS management the independence of a “normal” company despite the fact that core government stakes are rising to 28 percent from 20 percent.

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 praised Enders, promoted to CEO nine months ago, who he said would get “the keys of this huge company”.

Having waited until after Daimler to start selling shares, Lagardere’s company stands to gain from the sale of stock worth 2.5 billion euros at current prices, with shares standing at more than twice the original flotation price of 18 euros.


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.

Daimler aims to sell its remaining 7.5 percent stake in the second half of this year, a source familiar with the matter said.

In an oblique reference to strains on European integration brought about the financial crisis, Enders said EADS would not have been created as things stand today. But the aerospace group boss also told shareholders it was time to move on.

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.

EADS left open its options on how to implement the buyback, whose cost has risen sharply since it was announced in December, igniting a 39 percent rally in the shares since year end.

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 and Spain 4 percent, with a lock-up expiring on July 31.

While supporters of Boeing, which is locked in a trade dispute with Airbus over subsidies, have said the stakes show EADS remains in the thrall of European governments, Enders said France, in particular, had relinquished real powers.

Acting through Lagardere, Paris could previously veto buys of over 500 million euros, a relatively small sum in aerospace.

Governments will have influence, just as they do over companies with defence operations worldwide, but have given up the tools to make their voices heard in the boardroom directly, Enders told reporters after the meeting.

The changes were agreed after EADS failed to buy BAE Systems last year.

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.

Spain is taking advantage of the changes to sell most of its surplus, or 1.15 percent of EADS, more quickly than expected.

The move is likely to fuel questions over whether France will also sell a 3 percent stake left outside the new government shareholder block, but officials say no decision has been taken.

The changes approved in Amsterdam on Wednesday will take effect once the transition is completed, probably on April 2. EADS said parties to the new ownership agreement had agreed to let Spain sell its extra shares between then and April 9.

(Editing by James Regan and David Holmes)

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DealBook: IHH Healthcare of Malaysia Raises $2 Billion in I.P.O.

IHH Healthcare's chairman, Abu Bakar Suleiman, left, with Prime Minister Najib Razak of Malaysia, holding the prospectus for the company.Bazuki Muhammad/ReutersIHH Healthcare’s chairman, Abu Bakar Suleiman, left, with Prime Minister Najib Razak of Malaysia, holding the prospectus for the company.

HONG KONG — IHH Healthcare, one of Asia’s biggest hospital operators, raised $2 billion selling shares in Malaysia and Singapore on Thursday in the world’s third-largest initial public offering this year. The shares priced at the top of the range after having been marketed at 2.67 ringgit to 2.85 ringgit apiece.

While global investors have shown scant appetite for huge new listings since Facebook’s botched $16 billion I.P.O. on the Nasdaq stock market in May, Malaysia has emerged as a relative bright spot.

The Southeast Asian nation was also home to the world’s second-biggest offering of the year, the $3.1 billion listing of the palm oil producer Felda Global Ventures on the Kuala Lumpur exchange in June.

IHH, owned by the Malaysian state investment firm Kazanah Nasional and the Japanese trading house Mitsui Company, sold 2.23 billion shares, or a 27 percent stake in the company, pricing the dual offering at 2.80 Malaysian ringgit and 1.11 Singapore dollars a share, or 87 American cents a share, according to stock exchange filings.

IHH employs 24,000 people worldwide at 30 hospitals with more than 4,900 beds, and claims a leading market position in Singapore, Malaysia, Turkey, China, Hong Kong and India.

As a part of the offering, the Dubai-based private equity group Abraaj cashed out its entire 7 percent stake, worth $381 million and consisting of 434.65 million existing shares. The rest of the I.P.O. shares, most of which were sold in Malaysia, were new shares.

Similar to last month’s Felda deal, the IHH share sale was heavily reliant on so-called cornerstone investors to help ensure its success. Cornerstones are large strategic or financial investors who are allotted a large chunk of shares in exchange for agreeing to hold them for a specified lockup period during which the shares cannot be sold.

IHH sold 1.39 billion shares to more than 20 cornerstone investors, accounting for an uncommonly high 62 percent of the total offering. Investors including the AIA Group, Blackrock Investment Management, the Government of Singapore Investment Corporation and the Kuwait Investment Authority all agreed to a six-month lockup on their shares.

Bank of America Merrill Lynch, C.I.M.B. and Deutsche Bank were the joint coordinators of the deal, while Credit Suisse, DBS Bank and Goldman Sachs were the joint bookrunners.

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