Wellington, Fla.-based B/E Aerospace has been under pressure from activist investor Relational Investors LLC, a San Diego-based hedge fund that according to sources had been planning to nominate two candidates to the aerospace manufacturer's board. But a source close to the situation said late Tuesday that Relational is reconsidering whether it will push for board seats following B/E Aerospace's announcement that it would spin off its distribution business to shareholders.
B/E Aerospace on May 4 surprised shareholders by canceling an investor meeting and announcing it was exploring options. The company last week postponed its annual meeting but said Tuesday it intends to set a new meeting date in the next 60 days.
With the new meeting now likely to occur late in the year, the source said that Relational might see value in giving B/E Aerospace time to pursue a spinoff and then nominating candidates at the 2015 meeting, if it sees fit.
A truce could further pressure B/E Aerospace shares, which dropped more than 4.5% on Tuesday after the company said it was splitting instead of selling. B/E Aerospace stressed Tuesday it would continue to explore alternatives, but a pull back by Relational could be viewed as a signal that no deal for B/E Aerospace is likely until the spinoff is completed in 2015.
Canaccord Genuity analyst Ken Herbert on Wednesday lowered B/E Aerospace to a hold on the decreasing prospects for a sale of the entire company.