BAe denies plan to unload DAF

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The Independent Online
BRITISH AEROSPACE yesterday sought to quash City speculation that it is preparing to sell its 16 per cent stake in DAF, the Anglo-Dutch trucks company.

Rumours that the loss-making group is close to clinching a 100m guilder ( pounds 31m) loan from the Dutch government prompted analysts to speculate that BAe might attempt to place its holding with institutions.

Last night a BAe spokesman said: 'Currently we have no plans to dispose of our DAF stake. In 10 or 20 years' time we might but we don't intend to for the foreseeable future.'

BAe inherited a 40 per cent stake in DAF through its controversial pounds 150m acquisition of the Rover car group in 1988.

It netted pounds 88m by selling 60 per cent of the holding when DAF shares were floated a year later. Shortly after the flotation, BAe's remaining shareholding was worth pounds 78m.

Since then, however, DAF's fortunes have gone into reverse with the collapse of the truck market. Last year its losses reached a record 394.5 million guilders, forcing it to scrap the dividend and reduce its workforce by 2,000.

Analysts believe BAe's new chairman, John Cahill, has identified the DAF stake as a non-core holding. But to dispose of the stake BAe would need the approval of the other large shareholder, the Van Doorn family.

There is also persistent speculation that BAe is planning to put Rover up for sale. Although several overseas car makers would be interested, a sale looks unlikely before next summer.