(Refiling to fix typographical error in headline to make it
"blind" instead of "bind")
LONDON/PARIS Feb 23 Hedge fund TCI Fund
Management, locked in a war of words with Safran SA
over the aerospace firm's proposed bid for Zodiac Aerospace SA
, said on Thursday the company had no proof that its
valuation of the deal made sense.
Safran, responding earlier on Thursday to TCI's criticisms
of the deal, said its board had valued the offer at 13 times
operating earnings based on Zodiac's recent margin guidance for
2019-20 and considered this to be in line with similar deals.
Commenting on the letter from Safran Chairman Ross McInnes,
TCI said the valuation was based on fragile assumptions given a
recent spate of Zodiac profit warnings and Safran's inability to
carry out due diligence at Zodiac's aircraft seat factories.
"The multiple he is quoting, he has no certainty whatsoever
that he will be able to achieve it. If Zodiac failed to achieve
that multiple, why would he be able to achieve it?", Jonathan
Amouyal, a partner at UK-based TCI, told Reuters in response to
the rebuttal by Safran's McInnes.
Safran, a leading aero engine maker, says it can apply
state-of-the-art project skills to ensure Zodiac hits its goals.
Amouyal cited a report by Bernstein analysts who valued the
transaction at closer to 40 times operating earnings, among the
sector's highest for a decade, based on current performance.
Safran says that Zodiac has to be valued on a medium-term
perspective because it is in the midst of a turnaround.
(Reporting by Maiya Keidan, Tim Hepher; Editing by Jonathan