By Julie Johnsson
By Julie Johnsson
CHICAGO â€“ Textron Inc., the manufacturer of Cessna aircraft and Bell helicopters, rose the most in almost two years after the Financial Times reported Friday that the company was near a $1.4 billion purchase of planemaker Beechcraft Corp.
Dave Sylvestre, a spokesman for Providence-based Textron, declined to comment on the report, as did Nicole Alexander, a Beechcraft spokeswoman.
Adding Beechcraft would expand Cessnaâ€™s lineup of piston-engine and turboprop planes, a less-competitive field than private jets. Formerly known as Hawker Beechcraft, the company left bankruptcy protection in February and stopped making business jets to focus on propeller-driven models such as military trainers and the twin-engine King Air.
â€śThe remaining Beechcraft business is a solid annuity franchise that should complement what Cessna has,â€ť Robert Stallard, a London-based analyst at RBC Capital Markets, wrote Friday in a note to clients. â€śTextron has been in debt pay-down mode for a number of years and with a cleaned-up balance sheet, it has the capacity to do a deal of this size.â€ť
Textron jumped 14 percent to $37.29 at the close in New York on Friday, the highest closing price since September 2008 and the biggest advance since January 2012. That pushed the stock to a 50 percent gain this year. More than 12.7 million shares changed hands, the most since April.
Slumping demand for private jets and curbs on U.S. defense spending led Wichita, Kan.-based Hawker Beechcraft to file for bankruptcy in May 2012. Negotiations to sell it for $1.79 billion to a Chinese buyer collapsed months later.
Textron CEO Scott Donnelly expressed interest in Beechcraft during a July 2012 quarterly earnings call after the Chinese bid for planemaker was made public. In October, Textron declined to comment after people familiar with the matter said the company was among possible suitors exploring a bid after Beechcraft put itself on the block.
Adding Beechcraft would bolster an aviation business that accounted for 60 percent of Textronâ€™s $12.2 billion in revenue last year. Products including the Commando four-wheeled armored vehicle and E-Z-Go golf carts make up the remainder of its sales.