BAE Systems, EADS and their respective boards were locked in talks last night as the two sides scrambled to make enough progress on their proposed £30bn merger to ask the Takeover Panel for extension on today's deadline to agree terms.
Although one source warned that "the situation was still quite fluid", both sides were hopeful last night that they – and the French, German and UK governments – had found enough common ground to be in with a chance of agreeing a deal that satisfied all camps.
Their confidence was buoyed by a breakthrough in talks between Britain and France over state shareholdings, although doubts remained over whether Germany would back the proposal. Under Takeover Panel rules, BAE and EADS have been given until 5pm today to agree a merger or walk away. News of the proposed deal leaked into the market last month before the companies had had a chance to finalise the details.
The two sides were last night thought to have resolved enough of their differences to ask the Takeover Panel to extend the deadline, a request that was expected to be granted. However, sources cautioned that, given the complexity of the deal, there was still a chance they would give up and walk away.
Speaking after meeting with his opposite numbers from Germany and France at a Nato conference in Brussels yesterday afternoon, the Defence Secretary, Philip Hammond, said: "I think the companies now have a very clear understanding of the positions and red lines of the governments involved. They will make an announcement, as I understand it, before London Stock Exchange opens."
The issues that still need to be resolved include the location of the group's headquarters, which had been expected to be located at the Airbus head office in Toulouse until Germany said on Friday that it wanted it to be in Munich.Reuse content