Airbus Group said it is selling a further 15% stake in business and fighter jet maker Dassault Aviation as it continues to unwind its 16-year-old link to its defense market rival.

After the placement of around 1.38 million ordinary shares, Airbus' stake will drop to around 27% from 42%, it said in a statement on Wednesday 25 March 2015.

Dassault Aviation, which has asked Euronext to suspend trading in its shares, said it will take part in the placement by purchasing a maximum of 5% of its share capital at a maximum price of 980 Euros (721 pounds) per share.

Airbus cut its stake to 42.1% from 46.3% in November and said at the time it would make its “best efforts” to sell up to 10% more by June 30 through one or more placements.

The initial disposal followed months of negotiations between Airbus, Dassault and the French government, on whose behalf Airbus holds its stake in an arrangement considered outdated by its management and some investors who have urged it to cash out.

On Wednesday Airbus said “that the French state had chosen not to exercise its right of first refusal on the stake”.

The placement includes an over-allotment option of up to 10% of the shares placed, excluding Dassault's portion, Airbus added.

BofA Merrill Lynch, Deutsche Bank, Goldman Sachs and JPMorgan are acting as joint bookrunners for the placement.

Some institutional investors have indicated interest for the full amount of shares being offered at a price of 980 Euros, Airbus said. The shares closed at 1,240 Euros each on Tuesday.

The final terms of the placement are expected to be announced on or about March 26, Airbus said, adding that the proceeds would be used for “general corporate purposes”.

Source: Reuters