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21 April 16. Zodiac Aero ‘not for sale’ as Safran reported mulling offer. France’s Zodiac Aerospace said on Thursday it was “not for sale” after a report that larger French aerospace group Safran was considering making an offer.
Citing people familiar with the matter, Bloomberg News reported Safran was in the early stages of deliberating whether to make an offer that would create a major European supplier, and could still decide against such a move.
A spokesman for Zodiac Aerospace reiterated recent comments by the company’s chief executive that it is “not for sale.”
A spokeswoman for civil and military jet engine maker Safran said, “We never comment on market rumours”.
Safran shares closed earlier up 1.5 percent at 62.68 euros, valuing it at 25.8bn euros.
Zodiac rose 4.8 percent in a second day of gains after reporting lower seat production delays, in a respite from recent profit warnings. Its market value is 5.3bn euros.
Safran has frequently been linked with Zodiac as suppliers combine technologies and after-sales services to support record aircraft production plans, but such a tie-up is also seen as fraught with difficulties.
Industry experts have said Safran is unlikely to revive interest in Zodiac, which is in the midst of recovering from what its management describes as a “crisis” over delays in its U.S. seat production plants.
Zodiac’s swift response to the latest report suggests Safran may have to mount a hostile bid if it wants to buy the seats maker, a prospect which led it to halt a pursuit in 2010 when Zodiac’s controlling families rejected Safran’s approach.
Industry experts say Safran’s partially state-owned structure weighs against making hostile offers, a tactic only rarely used in France and one which causes particular concerns in the country’s close-knit and conservative defence sector.
In March, Zodiac Chief Executive Olivier Zarrouati told analysts it would nonetheless consider any offer “that we consider to be in the interests of shareholders.”
A group of French families controls some 23 percent of capital and 36 percent of voting rights in Zodiac under a shareholder pact. They have agreed to keep their shares under an agreement which is renewed each June, unless cancelled.
Safran earlier agreed to sell its U.S.-based Morpho Detection business to UK’s Smiths Group for an enterprise value of $710m.
RBC Capital Markets analyst Rob Stallard said Safran was not expected to use the cash for any significant M&A as it focuses on meeting ambitious jet engine production targets. (Source: Reuters)
21 April 16. Microsoft revenue, profit misses estimates. Microsoft Corp (MSFT.O) reported results that fell short of analysts’ expectations, showing its high-profile cloud business cannot quite make up for a slowing personal-computer market. Shares fell 5 percent in after hours trade to $52.92. Two of Microsoft’s three major businesses showed lower operating profits, led by what Microsoft calls its intelligent cloud division, which includes its Azure cloud-services business as well as traditional server software. Despite revenue at Azure more than doubling, revenue in the division grew just 3 percent.
“We would have liked to have seen 7 to 9 percent growth,” Dan Morgan, a portfolio manager at Synovus Trust who holds Microsoft shares, said of intelligent cloud revenue. “We’re trying to validate this story that Microsoft is truly becoming a cloud company, and they’re not going to be relying on the desktop computer.”
Microsoft executives said that the shortfalls in the intelligent cloud business were due to pressure on products that were tangential to the main cloud push, such as server software, which mollified some investors.
“Microsoft’s cloud busin