EADS weighs legal action over market rumours

PARIS, Oct 9 (Reuters) - EADS is considering takinglegal action after a series of media reports about the progressof negotiations with BAE Systems affected its shareprice, a source familiar with EADS thinking said on Tuesday.

"EADS is seriously contemplating filing a complaint forstock market manipulation following the observation of multipleleaks and false rumours," the source said.

An EADS spokesman was not immediately available for comment.

On both Friday and Tuesday, the aerospace group deniedmedia reports that the talks had collapsed. Both the reports anddenials caused movements in its shares.

On Tuesday, EADS shares closed down 0.6 percent after risingsharply on the latest report of talks failing.

Several investors have criticised the merger proposal,leading to falls in EADS shares when details of the talks wereleaked and gains when the talks seemed to encounter problems.EADS and BAE have said they are unable to give investors fulldetails of the plan yet for regulatory reasons.

EADS is listed in Paris where the legal system allowsplaintiffs to launch lawsuits against unknown persons before thedefendants can be identified, prompting an investigation.

The practice is not uncommon in major French corporate sagasand is often seen as a sign of heightened tensions orspeculation.

(Reporting by Tim Hepher; editing by Jane Barrett)

((tim.hepher@thomsonreuters.com)(+33 1 49 49 54 52)(ReutersMessaging: tim.hepher.thomsonreuters@reuters.net))