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Zodiac Aerospace accepts reduced Safran offer after profit warnings

Staff Writer |
Zodiac Aerospace board has accepted a 15 percent cut in a takeover offer from aero engine maker Safran to create the world's third largest aerospace supplier after a string of profit warnings from the aircraft seat maker.

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The joint announcement follows weeks in which conflicting movements in share prices weakened Safran's original $9 billion offer and keeps alive plans to forge a major new French supplier to planemakers such as Airbus and Boeing.

Safran cut its offer by $1.3 billion to $7.7 billion to reflect the change in Zodiac's fortunes but said it was confident of resolving its problems after visiting its plants, including a British factory blamed for the latest profit downgrade.

Safran also simplified its proposal to a traditional cash and shares offer, rather than the two-stage process previously agreed that involved a cash bid for at least half the company followed by a merger - a rare hybrid designed to protect tax breaks for core Zodiac shareholders.

The French engine maker said it was now offering 25 euros per Zodiac share in cash, down from 29.47 euros previously, and would give Zodiac shareholders an alternative of preferred shares up to a total of 31.4 percent of the $7.7 billion deal.

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