Cessna Takeover Rumors Drive Market Spike
Market analysts say Textron, the parent company of Cessna and Bell Helicopter, is prime for a takeover bid, and speculation grew this week that a move is imminent, perhaps by Lockheed Martin or Raytheon. Sikorsky officials have also expressed interest in acquiring Bell, according to Reuters. None of the companies would comment on the rumors, but Textron's stocks rose 11 percent by Tuesday, trading at 12 times the usual volume. Aviation analyst Richard Aboulafia told the Wichita Eagle that both Cessna and Bell are solid companies that would be attractive to buyers. Other analysts, however, noted that some of Textron's other divisions, such as a golf-cart company, would be less appealing. Officials at Textron have said that divisions may be sold off one by one if necessary to raise cash. Textron share values dropped 87 percent over the last year, and last week more layoffs at Cessna were announced.
Textron is exiting most of its finance business to try to stem losses and has reduced its dividend to conserve cash, the Providence Journal reported on Tuesday. The company recently sold off one division, HR Textron, a supplier of systems and products for aircraft and turbine engines, including the F-35 Joint Strike Fighter and X-45 unmanned combat air vehicle, raising about $265 million.