February 14, 2017 / 7:49 PM / 8 months ago

TCI Fund urges French market regulator to intervene on Zodiac-Safran tie-up

PARIS (Reuters) - Hedge fund TCI Fund Management wrote to French market regulator AMF on Tuesday to protest against aero engine maker Safran’s (SAF.PA) agreed bid for seats manufacturer Zodiac Aerospace (ZODC.PA), saying it risks violating shareholders’ rights.

The $9 billion Safran-Zodiac tie-up plan aims to create the world’s third-largest aerospace supplier as the industry bulks up to tackle record high output plans.

“We believe that the AMF should intervene in order to ensure the protection of the rights of the shareholders of both Safran and Zodiac Aerospace,” TCI head Christopher Hohn said in the letter published on the fund’s website.

A spokeswoman for Safran declined to comment. A spokeswoman for the AMF could not immediately be reached.

TCI Fund owns about 3.87 percent of Safran’s capital and, together with other clients of TCI, that reaches about 4.13 percent, he said, adding that TCI is also a shareholder of Zodiac.

Hohn writes that he fears shareholders will only be consulted on the public tender offer after it has been initiated.

“If this were to be the case, we believe that launching a public tender offer prior to a vote on the merger by Safran shareholders would be in violation of the rights of Safran shareholders and in violation of the principle of equal access to information for all Zodiac shareholders,” Hohn wrote.

“In order to preserve Safran shareholders’ voting rights, a vote of the extraordinary shareholders’ meeting of Safran on the merger must take place before the filing of the public tender offer.”

Reporting by Ingrid Melander; Editing by Ruth Pitchford

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