UPDATE 1-Zodiac rejects Safran takeover approach

* Offer comes in letter from Safran CEO

* Zodiac says not looking for partner or backer
(Recasts after conference call)

PARIS, July 11 (BestGrowthStock) – French aerospace group Zodiac
Aerospace SA (ZODC.PA: ) said on Sunday it rejected a preliminary
takeover approach from state-controlled Safran SA (SAF.PA: ) and
vowed to stay independent and even seek more acquisitions.

Zodiac, the maker of aircraft systems and cabin interiors,
said its board considered a “friendly” offer of talks from
Safran Chief Executive Jean-Paul Herteman on an “industrial
combination of the two groups,” but decided it did not make
sense.

Safran, which makes jet engines, aircraft parts and
security systems, was not immediately available for comment.

Zodiac CEO Olivier Zarrouati said the proposal did not
include any financial details, but that Safran’s idea had been
to offer shares for Zodiac while not ruling out some cash.

Zarrouati said Zodiac, which made three acquisitions in
June and is looking out for more, was large enough to support
its future development, backed by a recent 1 billion euro bank
financing.

Safran’s proposal would have “destroyed value” and any
synergies that were produced would have been “modest or
extremely modest,” he told reporters on a conference call.

“Zodiac is not looking for a partner or backer,” he said.

Zodiac is effectively controlled by a group of French
families, including that of Chairman Didier Domange, which owns
17 percent of the shares.

Zarrouati said the supervisory board had voted unanimously
not to take up the Safran proposal.

Zodiac has been the subject of merger speculation involving
Safran or Thales, another state-controlled French aerospace and
defence group, for several years. But this is the first time it
received a formal proposal by letter, Zarrouati said.

Shares in Zodiac have risen 37 percent this year, lagging
Safran, which are up 63 percent. Zodiac has a market value of
2.2 billion euros ($2.79 billion).

Zarrouati said Zodiac saw no need to change its guidance
and was “in the comfort zone” towards achieving it.
(Reporting by Tim Hepher, Sophie Taylor; editing by Jeffrey
Benkoe)

UPDATE 1-Zodiac rejects Safran takeover approach