Valuation fears cloud EADS shake-up

EADS co-chief executive Noel Forgeard quit on Sunday after losing a bitter struggle to keep his post at Europe’s aerospace giant, and the man who had replaced him as the head of Airbus a year ago, Gustav Humbert, resigned in Forgeard’s wake. EADS appointed French railways chief and aeronautics expert Louis Gallois to replace Forgeard and an industry outsider, the former number two at glassmaker Saint-Gobain, Christian Streiff, to shore up the industrial processes at Toulouse-based Airbus.

Analysts welcomed the boardroom shake-up but also expressed concerns over a lower-than-expected valuation on Airbus implied by a separate weekend announcement on the terms under which BAE Systems could sell its 20 per cent Airbus stake to EADS.

A report by investment bank Rothschild valued BAE’s stake at 2.75 billion euros ($3.5 billion). EADS plans to pay for the stake in cash.

CM-CIC Securities raised its rating on EADS to ‘‘accumulate’’ from ‘‘reduce,’’ saying the boardroom changes removed some uncertainty over the stock.

However, several others focused on Airbus’s lower-than-expected valuation, which also sent shares in BAE Systems down more than 6 per cent at one stage.

–Tim Hepher & Benoit Van Overstraeten