Stands By Legality Of Confidentiality Clause

ANN REALTIME UPDATE 07.11.08 1900 EDT: Below is the official statement from Dr. Bruno M. Kuebler, insolvency administrator for Thielert Aircraft Engines, in response to Diamond Aircraft's announcement Friday it will not pursue bidding for the assets of TAE:

"We have learned of Diamond Aircraft's decision, not to participate in the bidding process via the press and have taken notice of it. However, the procedure of the bidding process including the confidentiality agreement comply with international standards. Like all other potential investors, Diamond would have received comprehensive Information regarding the situation of Thielert after signing the confidentiality agreement.

"Hence, the reasons Diamond is presenting for its non-participation are clearly pretext. Possibly Diamond have had to recognize that the bidding process is only meant for prospective buyers that are seriously interested. Diamond's actions clearly serve the purpose of derogating Thielert's reputation in the naive assumption to be able to subsequently purchase Thielert far under value."

And the sniping continues...

Original Report

1200 EDT: They're out. Diamond Aircraft announced Friday the company, and we quote, "will not participate in the TAE Bidding Process!"

Diamond tells ANN it wont submit a bid for the insolvent German enginemaker "upon review of the Confidentiality Agreement and Summary Description of TAE, as provided by Insolvency Administrator [Bruno] Kuebler," the company writes. "The Summary Description, in Diamond’s opinion, withholds relevant facts regarding the TAE engines, the TAE customers and the competitive market forces."

The planemaker adds restrictions of the Confidentiality Agreement -- a required stipulation for any interested bidders for Thielert, as ANN reported earlier this week -- "effectively preclude the obtaining of factual and objective information about TAE and its engine development and production, that is vital to the due diligence process regarding the valuation of TAE and the evaluation of the business risks."

Diamond and Kuebler have traded very public PR blows since May, when the planemaker accused the insolvency administrator of acting not in the best interests of Thielert, or its customers... but was only looking to sell off the company as expeditiously as possible. 

Last month, Diamond proposed a consortium of companies, including Piper and Cessna, to join together to purchase the assets of Thielert. That suggestion -- and the targeted $79 million purchase price -- was soundly denounced as "noise" by Kuebler, who claims "over 50" prospective buyers for Thielert's assets.

Diamond's announcement Friday may mark the end of harsh rhetoric flying between Kuebler and Diamond... but the planemaker got its last licks in. "The insolvency administrator is continuing his pattern of release of only partial information," the company said of Kuebler. "Diamond will not participate in such a process."

The Austrian-Canadian manufacturer has been Thielert's largest customer for its Jet-A fueled, aviation diesel engines for years... but may not be for much longer, as Austro Engines -- a stand-alone company with close ties to the planemaker -- is hard at work to develop its own diesel powerplant.

FMI: www.thielert.com, www.diamond-air.at/