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PARIS (Reuters) - Hedge fund TCI Fund Management renewed pressure on France's Safran to suspend its bid to buy Zodiac Aerospace after the aircraft seats maker issued a second profit warning in as many months.
TCI has waged a public campaign to persuade Safran to cancel its proposed $9 billion offer for Zodiac, saying it was overpaying for a struggling company, a view underpinned by Zodiac's posting of a first-half operating loss.
"These are disastrous results from Zodiac yet again... Zodiac's business continues to implode with no sign of recovery," TCI founder Christopher Hohn said in an emailed statement.
"Zodiac is in serious financial difficulty and we think it needs an emergency rights issue, which would cause the Zodiac share price to fall substantially," he said, adding the appointment of a new special board adviser was a distraction from the company's problems.
TCI partner Jonathan Amouyal told Reuters by phone that despite this, the fund was not ruling out a deal completely.
"They are paying a top price when the sea of uncertainty could not be any higher... our advice is don't rush it."
"Do more work, let the dust settle, come back in six months' time, in one year or two years once you have further conviction in your capability to turn it around and then buy it but don't pay a top price today on top of uncertainty," he said.
For its part, Safran on Friday said it would continue talks with Zodiac despite the latter's profit warning.
Reporting by Tim Hepher; Editing by Andrew Callus and Adrian Croft