Norris: Why EADS needs BAE like a hole in the head

M&A

Shares in both UK defence contractor BAE and European rival EADS slumped on Thursday following merger talks between the two as investors were sceptical about the proposed terms of the deal.

One angry EADS shareholder Barry Norris, founding partner and CIO at Argonaut Capital Partners, has voiced his concerns about EADS sharing its bumper cash balance with BAE and doubts on whether a merger would really mean sharing of costs.  "Argonaut has been an investor in EADS since 2009 when the shares traded at €13, compared to €30 before the proposed merger with BAE was announced yesterday. "Our investment rationale has been based around the attractiveness of the Airbus franchise which today accounts for over half of all new civil aeroplanes sold each year. Civil aerospace is an a...