Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nyse  >  Boeing Company (The)    BA

BOEING COMPANY (THE) (BA)
My previous session
Most popular
  Report  
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsOfficial PublicationsSector newsTweets
OFFRE

Embraer counts on Brazil's public-sector funds to approve Boeing JV: sources

share with twitter share with LinkedIn share with facebook
share via e-mail
0
07/12/2018 | 02:15am CEST
FILE PHOTO: The logo of Brazilian aviation company Embraer is seen on a factory in Sao Jose dos Campos

SAO PAULO (Reuters) - Planemaker Embraer is counting on the votes of public-sector Brazilian shareholders to outweigh any potential investor objections to its tie-up with Boeing SA, two people with knowledge of the matter said.

Doubts about the valuation of Embraer's commercial jet unit in a proposed $4.75 billion joint venture sent Embraer shares tumbling nearly 15 percent in a single day last week, although shares are still up 32 percent since the deal was first reported.

Some small investors have complained the deal effectively gives Boeing control of Embraer's main business without having to pay the 50 percent premium called for in a poison pill in the planemaker's bylaws. Top foreign shareholders have so far kept mum on the issue.

Even if those offshore investors do object, however, one of Embraer's little-known corporate bylaws will effectively give a Brazilian-held share about six times the weight of a foreigner's at a shareholder assembly, according to the sources who requested anonymity to discuss the deal publicly.

The support of public-sector pension fund Previ and state development bank BNDES, which together hold about 10 percent of Embraer shares may thus prove decisive, the sources added, underlining the sway of the Brazilian government which also has a "golden share" in the formerly state-controlled company.

Embraer, Boeing and Previ declined to comment on the matter.

BNDES did not reply to questions.

LITTLE-KNOWN BYLAW

Embraer's corporate statutes grant Brazilians at least 60 percent of voting rights at shareholder meetings, even though domestic shareholders held just 19 percent of Embraer's outstanding shares as of March, according to the company — and about half of those belong to Previ and BNDES.

BNDES, which holds the shares through investment arm BNDES Participações SA, was part of a government working group discussing the tie-up along with representatives of the finance and defense ministries. BNDES head Dyogo Oliveira on Tuesday said it was "certainly a good deal."

Previ, which manages pensions for employees of state-controlled lender Banco do Brasil, has not made its stance on the deal public.

Embraer's top shareholders, Brandes Investment Partners LP, BlackRock Inc and Mondrian Investment Partners LP may also have their say limited by a bylaw restricting the voting rights of investors with more than 5 percent of shares — the case for all three as recently as March.

All three fund managers declined to comment.

SHAREHOLDER RESISTANCE

While Embraer shares are still up 32 percent since Boeing disclosed its interest, some analysts have suggested investors were shortchanged by the U.S. jetmaker's final offer.

The lack of a full takeover offer for Embraer, including its defense and business jet operations, was a result of the Brazilian government's concern about the sovereignty of military programs, backed up by its golden share.

"We see strong odds of Embraer shareholders demanding a higher price for the stake in the commercial segment, given this unit's strategic value and low financial impact on Boeing," BTG Pactual analyst Renato Mimica wrote in a Thursday note.

A local fund manager holding less than 1 percent of Embraer shares, who asked not to be named to preserve relations with management, said the valuation was low and asked why investors other than BNDES had not been previously consulted on the deal.

Facing an uphill battle at the shareholder assembly, Renato Chaves, a former director at pension fund Previ, filed a formal complaint to Brazilian securities regulator CVM last week.

Chaves argued the deal was designed to avoid Embraer's poison pill ensuring an offer to all shareholders with a 50 percent premium over market prices if any investor buys 35 percent or more of the company.

"What I see is Embraer selling 85 percent of its revenue to Boeing, and the poison pill should apply," said Chaves. "What they are doing is a disguised acquisition designed to avoid the poison pill."

CVM does not comment on investor complaints beyond its public decisions.

(Reporting by Tatiana Bautzer and Carolina Mandl; Additional reporting by Paula Laier and Flavia Bohone; Editing by Brad Haynes, Christian Plumb and Cynthia Osterman)

By Tatiana Bautzer and Carolina Mandl

Stocks mentioned in the article
ChangeLast1st jan.
AIRBUS SE -0.62% 106.14 Real-time Quote.28.67%
BANCO DO BRASIL 0.00% 30.58 End-of-day quote.-1.01%
BLACKROCK 0.10% 487.61 Delayed Quote.-5.08%
BOEING COMPANY (THE) 1.30% 372.23 Delayed Quote.26.22%
BOMBARDIER, INC. -2.12% 4.62 Delayed Quote.52.48%
EMBRAER 0.00% 19.1 End-of-day quote.-4.04%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on BOEING COMPANY (THE)
09/22BOEING : Federal Contracts Awarded to Companies in Missouri (Sept. 22)
AQ
09/22BOEING : EgyptAir to receive it’s first Boeing 787 Dreamliner in March
AQ
09/22PRECISION LASER GUIDANCE SET (PLGS) : Dsu-40a/b
AQ
09/21BOEING : Delivers First 787 Dreamliner for Shanghai Airlines
PR
09/21BOEING : MILITARY $40.32 Million Federal Contract Awarded to Boeing
AQ
09/21BOEING : Air Force Life Cycle Management Center awarded $15m contract for APG-82..
AQ
09/21BOEING : Kannur international airport ready for take-off
AQ
09/21BOEING : When a Boeing aircraft crashed in Greece due to cabin pressure loss
AQ
09/20Air Lease Corporation › Air Lease Corporation Announces Delivery of Bo..
AQ
09/19BOEING : Federal Contracts Awarded to Companies in Arizona (Sept. 19)
AQ
More news
News from SeekingAlpha
09/23BOEING : Next Stop $400 
09/23The Dogs Of The Dow September Update By Dividend Dogcatcher 
09/22STOCKS TO WATCH : Calling Up Animal Spirits 
09/21Can A Critical Boeing Supplier (Safran) Continue To Outperform Its Customer? 
09/21Boeing Extends Lead On Airbus 
Financials ($)
Sales 2018 98 632 M
EBIT 2018 11 405 M
Net income 2018 9 760 M
Debt 2018 3 361 M
Yield 2018 1,81%
P/E ratio 2018 22,57
P/E ratio 2019 19,22
EV / Sales 2018 2,20x
EV / Sales 2019 2,06x
Capitalization 214 B
Chart BOEING COMPANY (THE)
Duration : Period :
Boeing Company (The) Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends BOEING COMPANY (THE)
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 26
Average target price 413 $
Spread / Average Target 11%
EPS Revisions
Managers
NameTitle
Dennis A. Muilenburg Chairman, President & Chief Executive Officer
Jenette E. Ramos Senior Vice President-Supply Chain & Operations
Theodore Colbert Chief Information Officer & SVP-Data Analytics
Gregory L. Hyslop CTO, Senior VP-Engineering, Test & Technology
Kenneth M. Duberstein Director
Sector and Competitors
1st jan.Capitalization (M$)
BOEING COMPANY (THE)26.22%213 849
AIRBUS SE28.67%97 086
TEXTRON26.91%17 841
DASSAULT AVIATION23.58%15 662
AVIC ELECTROMECHANICAL SYSTEMS CO LTD--.--%4 500
AVICHINA INDUSTRY & TECHNOLOGY CO LTD17.66%3 745