Spirit Aero Stock Dips On Reports Of Boeing Changing Terms Of Acquisition Offer

(RTTNews) - Spirit AeroSystems shares were losing more than 5 percent in morning trade on the NYSE after Bloomberg reported that Boeing Co. changed the acquisition terms to stock offer from cash offer.

Boeing has now offered to buy its key supplier Spirit AeroSystems Holdings Inc. for about $35 per share in a mostly stock deal, Bloomberg reported citing people familiar with the matter. The aerospace and defence major earlier had offered to buy Spirit Aero, which makes parts of 737-9 MAX airplanes, in an all-cash deal.

The news comes as Boeing's European rival Airbus is reportedly moving forward with talks to buy select Spirit Aero sites, which makes A220, A350 parts.

The latest Boeing proposal represents a premium of nearly 6% over Spirit's stock closing price of $33.07 on Monday. It also represents a 22.4% hike to its closing price on February 29, the day before the previous takeover talks became public.

As per the report, the companies are in talks regarding the final terms of the latest offer, which is expected to be announced in a few days.

Boeing, which had spun off the Wichita, Kansas-based supplier in 2005, had initiated the takeover talks earlier this year with a view to stabilizing its key parts supply after 737-9 MAX airplanes were grounded following a January accident with a plane's mid-cabin door plug.

On January 5, a mid-cabin door plug on Alaska Airlines' Boeing 737-9 MAX airplane blew out in the middle of the flight.

Following the incident, the U.S. Federal Aviation Administration or FAA had grounded around 171 737 MAX 9 airplanes for inspections, and also started a probe into Boeing's manufacturing practices and production lines, including those involving subcontractor Spirit Aero.

In early March, the federal regulator identified multiple quality control lapses in its production audit of Boeing and Spirit Aero. The agency also halted production expansion of the Boeing 737 MAX with a view to holding Boeing accountable for its production quality issues.

Spirit AeroSystems shares were trading at $31.33, down 5.3 percent on the NYSE.

Boeing shares were at $175.73, down 1.88%.