Boeing (NYSE:BA) has revised its acquisition offer for Spirit AeroSystems (NYSE:SPR), proposing to fund the deal using stock instead of cash, Bloomberg News reported Monday.
According to the report, Boeing values SPR at $35 per share, translating to a total deal value of around $4.08 billion, according to Reuters’ calculations based on SPR’s outstanding shares as of May 7.
Spirit’s shares fell more than 3% in premarket trading Tuesday, while Boeing dropped 1.3%.
Initially, Boeing and Spirit, a jet fuselage manufacturer that Boeing spun off two decades ago, were nearing an all-cash agreement over the weekend. However, Boeing has now shifted to an offer primarily consisting of its own stock.
The discussions involved Boeing buying about two-thirds of Spirit’s business that supplies parts to the planemaker. As part of the agreement, Spirit will divest its operations that produce parts for Airbus, Boeing's competitor, which represents about 20% of Spirit's revenue.
The per-share offer represents a premium of nearly 6% over Spirit's closing stock price on Monday and a 22.4% increase from its closing price on February 29, the day before Boeing's takeover discussions became public.
“We await more details, but we see the $35/share mark as a reasonable outcome for both parties,” Stifel analysts commented on the revised offer.
“At $35/share, total equity value would be near $4.1B and with Boeing closing Monday at $179.10, that would require ~22.7m shares of BA (~4% dilution) to acquire SPR shares (assuming all equity) with our assumption that debt would be refinanced at lower rates or paid down post-acquisition,” analysts added.