Analysts Say Other Bids Likely To Come

Monday's announcement that Hawker Beechcraft had entered into an agreement with Superior Aviation Beijing for the purchase of the Wichita planemaker may have been what's known in the business world as a "stalking horse," according to some analysts. A stalking horse bid is one that's intended to "test the waters," and assure that the actual sales price of a company is not too low. It is often used in bankruptcy proceedings.

Bloomberg News reports that both Textron and Embraer have previously expressed an interest in Hawker Beechcraft, but before the company filed for bankruptcy protection in May, it's financial advisor had identified no fewer than 35 companies which might have been suitable buyers.

Textron would be interested in Hawker primarily for its propeller-drive aircraft and military division, according to Textron CEO Scott Donnely, who was interviewed at Farnborough Monday. The deal with Superior Aviation does not include Hawkers military airplanes. As early as April, Embraer CEO Frederico Curado had said the Brazilian company would be seriously looking at the company as a way to bolster its bizjet business.

Credit Suisse analyst Julian Mitchell said that part of Textron's interest in the company is that a sale of Hawker to the Chinese would deal a potentially major blow to Cessna's sales in China.

Meanwhile, aviation consultant Dave Franson told Wichita television station WKCH that the sale to Superior Aviation was an attempt by HBC to minimize the impact the company's bankruptcy would have on both its products and people.

The clock is now running on a 45-day windown in which the two parties have an opportunity to iron out any differences and close the deal. That could seem to bolster the stalking horse scenario. But Franson said Hawker has an incentive to close the deal with Superior, because if it falls apart, the company could return to bankruptcy in worse shape than it is now.

FMI: www.textron.com, www.embraer.com, www.hawkerbeechcraft.com