BAe confirms VSEL interest

BRITISH Aerospace broke its silence over VSEL, the Trident submarine builder, by confirming it was in talks that could lead to a recommended bid for the company. Negotiations, which stalled on Friday over price, are believed to have been resumed on Monday, writes Mary Fagan.

VSEL had demanded more than pounds 13 per share, against BAe's pounds 12.50, valuing the company at well over pounds 500m. VSEL would not comment but an industry source said talks were proceeding on a more hopeful basis.

BAe said a further announcement would be made soon. It is expected the issue will be resolved within a week.

BAe shares fell 3p to 439p yesterday, reflecting scepticism in the City over the deal. VSEL's shares rose by 17p to pounds 11.95.