Airbus parent EADS failed to rouse its recently trampled share price on Monday after the European aerospace giant forced out two top executives blamed for a two-week crisis over A380 superjumbo production blunders.
The leading European aerospace group's shares initially rose as much as 1.7 percent but then fell back by more than 2 percent. They were down 1.38 percent at 22.15 euros by 0815 GMT.
EADS co-chief executive Noel Forgeard quit on Sunday after losing a bitter struggle to keep his post at Europe's aerospace giant, and the man who had replaced him as the head of Airbus a year ago, Gustav Humbert, resigned in Forgeard's wake.
EADS appointed French railways chief and aeronautics expert Louis Gallois to replace Forgeard and an industry outsider, the former number two at glassmaker Saint-Gobain, Christian Streiff, to shore up the industrial processes at Toulouse-based Airbus.
Analysts welcomed the boardroom shake-up but also expressed concerns over a lower-than-expected valuation on Airbus implied by a separate weekend announcement on the terms under which BAE Systems could sell its 20 percent Airbus stake to EADS.
A report by investment bank Rothschild valued BAE's stake at 2.75 billion euros ($3.5 billion), sharply below the 5 billion euros value estimated by some analysts. EADS plans to pay for the stake in cash.
CM-CIC Securities raised its rating on EADS to accumulate from reduce, saying the boardroom changes removed some uncertainty over the stock.
However, several others focused on Airbus's lower-than-expected valuation, which also sent shares in BAE Systems down more than 6 percent at one stage.
This suggests that there are bigger problems on the A380 than is apparent or the market has been wrong with its Airbus valuation all along. This implies a total EADS enterprise value of 16.75 billion euros or 20.90 euros a share. And BAE was expected to make acquisitions so this is negative for the whole sector, one London-based dealer said.
RAILWAY BOSS STEPS IN
A showdown over who was to blame for the A380 delays that stripped a quarter off the EADS share price in June had caused uproar in France's parliament and threatened a row with Germany.
After two weeks of negotiations among industrial shareholders Lagardere, the French media-to-aerospace group, and German car firm DaimlerChrysler, together with the French government that also owns a stake, EADS announced Gallois' immediate appointment on Sunday.
Gallois, 62, is a former head of French state company Aerospatiale, whose Toulouse factories are now part of EADS. He also ran aero engine maker Snecma, now part of Safran.
Gallois is already an EADS board member.
After a year running Airbus as Forgeard's hand-picked successor, Humbert was replaced by Christian Streiff, former deputy CEO of French building materials group Saint-Gobain.
Humbert said the delays to the A380 had been a major disappointment for our customers, our shareholders and our employees, adding that he felt it was the right course of action to offer his resignation to shareholders.
The A380 delays are set to cost EADS some 2 billion euros in lost operating profits between 2007 and 2010. Its shares fell 26 percent, wiping out 5 billion euros of value, when the A380 delays were announced in mid-June, sparking a hunt by French AMF regulators to know exactly who knew what and when.
EADS STICKS WITH TWO CHAIRMEN, ONE CEO
EADS will continue for now to have two chairmen and two chief executives - a Frenchman and a German in each post. French Prime Minister Dominique de Villepin last week hinted at a two-stage answer to EADS's problems, but Finance Minister Thierry Breton said on Sunday the current system was working.
Breton had been seen as an advocate behind the scenes of changes to the double-headed structure but was blocked by industrial shareholders, sources close to the talks said.
Tom Enders, who remains the German co-CEO of EADS, will now assume responsibility for the Airbus shareholder committee.
Reporting to him will be the new Airbus chief Streiff, a bilingual French and German speaker.
EADS said Airbus would be integrated more closely into the parent company.
The management shake-up is also aimed at restoring stability to Airbus as it prepares to relaunch the slow-selling A350, possibly renaming it the A370, before the Farnborough air show in mid-July.
The market for the roughly 300-seat jet - estimated at thousands of planes rather than hundreds for the A380, according to industry analysts - is so far dominated by Boeing.
(additional reporting by Sophie Hares, Sudip Kar-Gupta)