EADS down amid investor concern
European Aeronautic, Defence and Space Co fell to the lowest price in more than 10 months in Paris trading amid investor concerns that Daimler may sell part of its stake on the market.
The maker of Airbus planes dropped as much as 3.9 per cent to €24.26, the lowest intraday price since January 2.
Handelsblatt newspaper today reported that the German carmaker will sell a 1.5 per cent stake to the German government and place the remainder of its holding in the market.
French President Francois Hollande and German Chancellor Angela Merkel discussed the issue of shareholdings at a European Union summit, and no decision has yet been taken, according to a French official.
Daimler has long-said it intends to exit its 22 per cent holding in EADS, and spokeswoman Silke Walters said today that standpoint hasn't altered.
With a looming sale of that stake, France and Germany plan to adjust their holdings to 12 per cent each to restore a balance, the newspaper said.
"The manoeuvring of the government shareholders, and the overhang of a potentially significant secondary sale are no doubt weighing on investor sentiment," said Robert Stallard, an analyst at RBC Capital Markets.
EADS traded 1.7 per cent down at €24.82 as of 1.16pm in the French capital.
The planemaker is regrouping under chief executive officer Tom Enders after his attempt to merge with BAE Systems failed two months ago.
The German government helped block the deal, concerned that the balance of power would shift toward France and the UK with the transaction.
"Fundamentally, the outlook for the company is completely detached from these government moves," Mr Stallard said.
"But coming fresh on the heels of the BAE talks, it has again reminded investors that EADS is not a standard, independent company."