Projo Biz Blog

Stock in Providence-based Textron rose the most in at least 28 years after Kuwait's Al-Watan newspaper reported that a United Arab Emirates group is preparing to buy the maker of Cessna aircraft and Bell helicopters for $21 a share.

Textron rose $4.55 a share to $13.67 at 12:15 p.m. in New York Stock Exchange composite trading. A deal at $21 would value the company at $5.1 billion based on 242.9 million outstanding shares.

The company's shares have fallen from a 52-week high of $65.52 on May 30 as the global credit crunch and recession reduced demand for aircraft and raised risks in its finance unit. Textron is exiting financing businesses other than those directly related to its manufacturing units.

"We do think it's possible the company could be sold,'' said JPMorgan Chase & Co. analyst Stephen Tusa. He values the manufacturing assets at about $12 a share. "It only takes one high bid to make the market, so we're not saying it does not happen, but it looks expensive.''

Textron spokeswoman Karen Gordon Quintal declined to comment, citing the company's policy of not discussing "rumor and speculation.''

The Kuwaiti newspaper didn't identify its sources. The buyers are interested in the civil operations of Textron and will sell its defense operations to an American company involved in the negotiations, Al-Watan said. The report said there was an assumption the agreement would be reached on a U.S. public holiday.

 Tags  Al-Watan Providence RI Textron United Arab Emirates

---