EADS execs said likely to weigh DRS bid on Monday

By Andrea Shalal-Esa

WASHINGTON (Reuters) - European defense company EADS (EAD.PA: Quote, Profile, Research, Stock Buzz) likely will consider a counterbid for U.S. military contractor DRS Technologies Inc (DRS.N: Quote, Profile, Research, Stock Buzz) at a regular monthly executive committee meeting on Monday, a source familiar with EADS' strategic thinking told Reuters on Friday.

EADS executives have made conflicting statements about their interest in DRS, which this week unveiled a $3.94 billion deal to be taken over by Italy's Finmeccanica SpA (SIFI.MI: Quote, Profile, Research, Stock Buzz).

The source, who asked not to be identified, acknowledged some internal differences over the issue, but said there was continuing EADS interest in making a counterbid and the issue would likely come up at Monday's meeting.

An EADS spokesman pointed to comments from EADS Chief Executive Louis Gallois on Wednesday in which he highlighted possible synergies from a DRS takeover and said the company remained on EADS' target list despite its merger agreement with Finmeccanica.

"DRS clearly creates synergistic effects and deserves a serious look," said the spokesman.

Wall Street analysts have been watching the situation closely after Ralph Crosby, chief executive of EADS North America, told reporters last Friday that his company was seriously considering a bid for DRS as part of a drive to expand its foothold in the U.S. defense market.

Early this week, Finmeccanica unveiled an agreement with DRS management to buy the company for $81 a share, or $3.94 billion. But the deal must still be approved by the DRS board and its shareholders, which gives EADS a chance to weigh in beforehand with a competing bid.

"I don't know what's going to happen, and there may be some internal hurdles, but there is definitely tremendous interest in DRS," said the source familiar with EADS strategy.  Continued...