BAE SYSTEMS’ largest shareholder yesterday spoke out to oppose the defence group’s £30bn merger with EADS, with sources suggesting that it would seek an overhaul of the group’s board if the deal failed.
“The relationship between the two has completely and utterly broken down,” said one source, “so you would expect there to be consequences.”
Neil Woodford, who manages around £20bn for BAE investor Invesco, has appointed Ondra Partners, the investment bank, to advise him on his strategy.
Ondra yesterday denied that the asset manager was looking for a counter bid.
Invesco, which owns 13.3 per cent of BAE, has a number of reservations regarding the merger, including concerns over state involvement, deal terms and its strategic rationale.
The firm is believed to be confident that shareholders representing more than 25 per cent of BAE’s equity – enough to block a deal – have reservations about the tie-up.
Woodford reckons BAE can be a successful standalone company but he is no fan of its recent heavy acquisition policy.
He has past form in pushing for change on some of Britain’s biggest boardrooms, with links to AstraZeneca boss David Brennan’s departure and this summer’s shake-up at G4S.
A source close to the BAE/EADS transaction said yesterday that talks with governments were “ploughing on” and everybody involved was working towards meeting the deadline, which is 5pm tomorrow.