But Will BAE Systems Accept It?

A third-party banking firm called in to settle the pricing dispute betweeen EADS and Britian's BAE Systems over the European consortium's buyout of BAE's stake in Airbus has agreed on a final pricetag... but it may not be enough to convince shareholders to sell.

EADS reports the investment bank Rothschild has determined the price to be paid by EADS for BAE Systems' 20 percent stake in Airbus is EUR 2.75 billion -- about $3.5 million US.

That price is over $1 billion less than BAE had been asking for its Airbus stake prior to the announcement of delays in the the A350 and A380 programs -- which have sent shares of EADS stock tumbling.

London's Guardian newspaper suggests that given the devalued price,  it may make more sense for BAE to hold onto its shares in Airbus -- for now -- and sell when the price rebounds.

BAE Systems was expected to use some of the buyout money to increase its investments in defense companies throughout the world, especially in the US.

As Aero-News reported in May, Rothschild was appointed by EADS and BAE Systems to determine the price after the two sides were unable to reach an agreement. BAE Systems exercised its Put Option regarding its stake in Airbus on June 7, putting the matter into the hands of a third party.

While both sides are bound to Rothschild's valuation of the selling price per the Airbus Shareholders' Agreement, the transaction remains subject to BAE Systems' shareholder approval... which may vote to scrub the deal entirely.

FMI: www.eads.com, www.baesystems.com