PINO MODOLA / GENOA
UK private equity firm teams with Piaggio to make g1.8bn bid after Snecma drops out
Doughty Hanson has emerged as a potential buyer for Italian aero engine manufacturer FiatAvio following the withdrawal of France's Snecma.
The UK private equity firm is teaming with local company Piaggio Aero Industries and has already presented a formal bid to the troubled Fiat Group, according to Italian press reports. Doughty Hanson says it "doesn't comment on deals that are being discussed".
Snecma withdrew from the race after its proposed partner, Italian state holding company Finmeccanica, insisted on being granted a "put" option, which gives it the right to sell Snecma its 50% of FiatAvio within a two-year period (Flight International, 18-24 March). Finmeccanica also wanted management control over the most attractive parts of FiatAvio, including its military and space activities.
The French government, which owns 97% of Snecma, claimed FiatAvio was overpriced at €1.6 billion ($1.7 billion) and said it would not offer more than €1.2 billion.
With the loss of the Snecma-Finmeccanica offer, the only other bid is that presented by the US Carlyle Group, reported to be worth nearly c1.7 billion. Fiat sources say Doughty Hanson's last minute offer is worth nearly €1.8 billion.
Doughty Hanson took over Fiat Group's Lubrificanti division, now renamed Fl Selenia, in April 2000, for €430 million. Piaggio already produces aircraft engines under licence at its Finale Ligure plant.
Snecma claims it is still interested in buying a stake in FiatAvio, but says such a cash investment needs to be made "with great care and prudence, notably given the current general economic climate and the aerospace climate in particular". It denies French press reports suggesting it disagrees with the French government over how much FiatAvio is worth.
Source: Flight International
