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Finmeccanica Gets Close to $5.4 Billion Bid for DRS

Italian aerospace and defence company Finmeccanica is close to making an offer of nearly 3.5 billion euros ($5.41 billion) for DRS Technologies, Il Sole 24 Ore business daily reported on Sunday.

The board of Finmeccanica met on Saturday to outline the bid for the U.S. military engineering and electronics company, it said. The board will meet again on Monday afternoon or on Tuesday to formalise the offer.

Deal, Handshake
Deal, Handshake

Il Sole 24 Ore said Finmeccanica was ready to spend 3.5 billion euros to buy the Parsippany, New Jersey, company. The DRS board also met on Saturday to discuss the deal, Il Sole 24 Ore said. The newspaper gave no sources for the story.

A spokesman for Finmeccanica had no comment. Corriere della Sera newspaper said Finmeccanica's board had not formalised its offer on Saturday.

Finmeccanica could carry out a capital increase to pay for the purchase, Corriere della Sera and Il Sole 24 Ore said.

They said besides the capital hike, Finmeccanica would be able to count on a line of credit from Italian investment bank Mediobanca, which is acting as bookrunner for a consorium of lenders.

The Wall Street Journal, citing people familiar with the matter, said on Thursday that DRS and Finmeccanica were in advanced talks.

DRS said it was in talks about a potential deal but did not identify which company or companies.

The European Aeronautic Defence and Space (EADS) is seriously examining the possibility of bidding for DRS, Ralph Crosby, chief executive of EADS North America, said on Friday.

At its Monday meeting Finmeccanica's board also could discuss the possible purchase of 15 percent to 20 percent of Italian electronics company Eurotech, Il Sole 24 Ore said.