DaimlerChrysler has not decided on how big a stake it will hold in aerospace group EADS in the long term after its sells a 7.5 percent stake next year. On Tuesday the company entered a forward sales agreement with banks that will lower its stake in EADS to approximately 22.5 percent as part of a carefully coordinated move with fellow EADS investor Lagardere.
The company and Lagardere said it would remain core shareholders in EADS, but did not specify what stake it intended to keep. Daimler shares increased as much as 2.5 percent to 49.24 euros on the news, while EADS shares fell 4.0 percent in Paris and 4.3 percent in Frankfurt. According to Daimler, the EADS stake sales would boost net income by about 1 billion euros in 2007.
Daimler was rated “equal weight” by Morgan Stanley, who estimated that selling the 7.5 percent stake would reduce earnings per share by 10 euro cents, or 2 percent, since the drop in earnings from affiliates would exceed the rise in interest income on the sale proceeds.
In a note to clients, analysts at Merck Finck said the deal is a further step toward the concentration on its core business, but has no impact on our view on DaimlerChrysler, keeping their “buy” rating for company shares.