Chris Hohn’s activist hedge fund has had another bite at French aircraft-engine maker Safran over a planned €8.5bn (£7.4bn) takeover.
The Children’s Investment (TCI) Fund, which owns a 4.1 per cent stake in Safran, publicised its opposition to the deal for plane-seat maker Zodiac last month, saying it had “no strategic rationale”.
Safran hit back shortly afterwards, accusing TCI of wanting to “destroy value” in the firm.
Today, TCI has had another nibble at Safran, claiming Zodiac’s latest financial figures, released today, demonstrate that the takeover offer is “hugely overpriced and will be enormously destructive to Safran shareholder value”.
“This is a 25 per cent downgrade to 2017 forecasts and it means that Zodiac is now in clear breach of its debt covenants,” said TCI partner Ben Walker.
“In light of this catastrophic business update from Zodiac, we believe that Safran management would be negligent not to walk away or substantially reduce the offer price.”
He added: “Zodiac is in extreme financial and operational difficulty and its problems cannot be fixed by Safran management, who have done zero due diligence on Zodiac’s business.
“Safran has not yet signed a binding deal with Zodiac so Safran must act responsibly and pull out of the deal now.”