MILAN (Reuters) -Italian defence company Leonardo has made the lowest bid for the defence business that automotive group Iveco has put up for sale, Bloomberg News reported, after the Rome government expressed a preference for a domestic buyer.
Iveco, which is controlled by Italy’s billionaire Agnelli family, in May said it would proceed with a spin-off of the defence business, which it expected to complete within the year subject to final approval by its board and shareholders.
Iveco said at the time that, having received some preliminary expressions of interest for the asset, it was considering them, while also keeping up the preparatory work for a possible spin-off.
State-backed Leonardo offered around 1.6 billion euros for the business, including debt, Bloomberg wrote on Thursday, citing people close to the matter.
Leonardo’s bid, which it submitted jointly with Germany’s Rheinmetall, trails that of Franco-German tankmaker KNDS, which offered closer to 1.9 billion euros, and Czechoslovak Group, Bloomberg said.
Representatives for both Leonardo and Iveco declined to comment.
Shares in Iveco plunged 6% after the report. A Milan-based trader said there were doubts about whether a sale could be finalised.
Iveco’s defence unit should remain in Italian hands, Defence Minister Guido Crosetto said in June, adding however that such a decision was up to the group’s shareholders.
A person with knowledge of the matter confirmed three binding bids had been submitted by Leonardo-Rheinmetall, KNDS and CSG, adding that the situation was in flux given diverging price expectations and the government’s preference for Leonardo.
Under its “golden power legislation”, Italy can vet buyers of assets deemed of strategic importance to the country, such as the Iveco unit, and can block or set terms for a sale.
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(Reporting by Giulio Piovaccari in Milan and Federica Mileo in Barcelona. Writing by Valentina Za. Editing by Maju Samuel and Jane Merriman)
