The Daily Mail, a British newspaper, is reporting today that GKN, an aerospace components group, may be on the verge of submitting a bid for Spirit AeroSystems for $5 billion "cash and shares bid, worth around $35 a share."
The paper is reporting that Bank of America/Merrill Lynch is said to be advising GKN on the deal.
"Speculation intensified on Wednesday with dealers hearing it is on the verge of launching ... the bid," the newspaper said.
The combination of the two companies "would offer potential for synergies and the benefit of industry consolidation," RBC analyst Robert Stallard said in a note to investors.
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Spirit, based in Wichita, would bolster GKN's connections to Boeing and its percentage of work it has in the aerospace sector, Stallard wrote.
The deal would have significant risk, he said, because of the hefty $590 million charge Spirit took in October 2012 on several "underpriced contracts." The company took the charge on several of its development programs. The size of the charge took analysts by surprise at the time.
The report from The Daily Mail comes atop speculation on Wednesday from union officials that Spirit was readying for layoffs.
Check back at Kansas.com later this morning for updates to the story.