Needs Funds For Aerospace Firm Purchases

BAE systems is giving the European Aeronautic Defense and Space Company (EADS) an ultimatum over the company's intent to sell its 20 percent stake in aircraft manufacturer Airbus: "put" up, or shut up.

BAE announced its is preparing to exercise a "put" option, that would speed up the pace of negotiations over the sale of its stake in Airbus to EADS.

As Aero-News reported last month, EADS -- which already owns 80 percent of Airbus -- is seen as eager to buy out the British company's stake in the aerospace consortium... but talks over the price of the buyout have stalled in recent weeks.

England's Sunday Times reports the put option -- which went into effect when Airbus was set up as an industrial company -- would require each side to immediately appoint banking advisers... who would then have 14 days to reach a deal.

If a price isn't agreed upon within that time, a third-party bank would be called in to arbitrate the deal.

In the wake of fallout over rumors Airbus is preparing to scuttle the A350 and start over on a new design, EADS has lowered the valuation of BAE's stake in Airbus to approximately $3.5 billion... but BAE is reportedly demanding over one billion more.

BAE has stated it will use the funds from the sale to acquire US aerospace companies... such as last year's acquisition of United Defense Industries, an American tank and armored vehicle manufacturer.

FMI: www.baesystems.com, www.eads.com