(Deletes repetition of Thursday in first paragraph)
By Chris Vellacott and Sinead Cruise
LONDON, Oct 11 (Reuters) - BAE Systems moved topatch up damaged relations with its investors on Thursday,promising imminent meetings to discuss its strategy after thefailure of its attempted merger with EADS , shareholderstold Reuters.
Investors are keen to hear management make its case andexplain how Europe's biggest defence contractor plans to keepgrowing when governments are cutting back on their militaryspending.
"We want to sit down with the company to talk throughexactly why they wanted to do this deal, and now that it won'tbe going ahead, what are the plans," said one of BAE's top 20shareholders.
"They implied this was a strategic necessity, and now theysay this setback is fine and that they can carry on as normal.Well, which is it?"
Investors contacted by Reuters after the proposed deal fellthrough said BAE's management has said it will meet them,possibly within days, to outline its plans.
Earlier this week fund manager Invesco, BAE's biggestshareholder with more than 13 percent of the company, fired abroadside at the company in an attempt to sink the merger,citing concerns over state interference, poor terms and lack ofstrategic rationale.
But now the deal is off the table many of the investors saidthey remained supportive of BAE's managers but still expect tosee a robust plan for the company's future, and will not settlefor pledges to find an alternative suitor, perhaps in the UnitedStates as a solution to its immediate challenges.
"They need to be clear now. The last thing you want to hearis they're just going to wait for a better suitor to come overthe hill. You want them to be actively managing the business andgetting on with the day-to-day business of winning moreinternational contracts," said another leading shareholder.
A number of investors said management were owed a modestamount of credit for engaging EADS in what they saw asan ambitious attempt to fulfill obligations to investors andexplore all possible ways of generating value for shareholders.
One major shareholder said he had supported the principle ofthe merger with the owner of Airbus as an effective way to meetBAE's challenge of diversifying away from its current dependenceon the weakening defence sector.
The failure of the deal is therefore an ominous sign for thecompany, he noted.
"BAE are left in a tricky position ... Consolidation wouldseem sensible in the face of such difficulties, but as we haveseen, this is not going to be easy to achieve," he said.
None of the investors contacted by Reuters demanded animmediate management overhaul following the deal's collapse butindicated that Chief Executive Ian King and Chairman Dick Olverface a tough few weeks in trying to restore their credibilityand avoid a vote of no confidence at the next shareholdermeeting.
"Until you sit down with the company, you cannot make thosekinds of judgments on whether the chairman should stay or go ...So we'll hold fire, talk to the company and then decide how wefeel about it," the first investor said.
(Editing by Greg Mahlich)