Airbus Group has sketched out the opening steps of a plan to unwind its 46 percent holding in Dassault Aviation, saying it was weighing the possibility of selling a 10 percent stake by placing it with financial institutions.
A spokesman said such a move, if it went ahead, would be combined with a further reduction of the company's shareholding by taking part in a share buyback being prepared separately by Dassault.
Shareholders in family-controlled Dassault Aviation, which makes Rafale fighter planes and Falcon business jets, last month approved a buyback of up to 10 percent of the company's tightly traded stock.
"That provides an obvious route for a partial exit," Airbus Group's head of corporate communications Rainer Ohler said.
"We believe, however, that longer-term value objectives might be better served through combining a sale to Dassault with the placing of a meaningful amount of shares in the market, enough for there to be much improved liquidity, and so we continue to review our options in this respect," Ohler said.
"A first placing of around 10 percent, combined with a (Dassault) buyback, would allow us to reach this objective. If we take this route, we could hope to capture subsequent value upsides through further secondary placings," Ohler added.
Dassault Aviation is controlled by family holding company Groupe Industriel Marcel Dassault, which owns 50.55 percent of the company. Airbus Group owns 46.32 percent and 3.13 percent is held by public investors.
Since the public float is not large enough to accommodate the buyback, Airbus Group could make up the bulk of that operation as well as selling shares to investors, meaning that if successful the deals could be worth close to EUR€2 billion.
Dassault has a market value of just under EUR€10 billion.
EXPRESSIONS OF INTEREST
In July, Airbus stepped up the pace of its efforts to end a longstanding arrangement to warehouse the Dassault stake on behalf of the French government, saying a sale of the shares was not a question of 'if' but 'when'.
It inherited the stake from former state-owned Aerospatiale along with a Paris headquarters building, whose recent sale boosted Airbus Group's half-year earnings.
Activist hedge fund TCI last year called the stake in Dassault "a poor use of capital" and urged Airbus to sell it.
Ohler said Airbus Group had received "numerous expressions of interest from investors" for its shares.
Analysts say the Dassault family wants to expand its market float and bring in new investors, while keeping control.
Dassault Aviation shares have risen 3.6 percent this year, compared with a 10.5 percent decline in Airbus Group stock.