BAE's secret plans to sell shipyards

DEFENCE giant BAE Systems secretly triggered an auction for its shipyards in a move that could open the way for the group to merge with US rival Boeing.

The company said it was putting its yards up for sale after receiving bid approaches. But Financial Mail on Sunday has established that BAE was the one to make informal approaches to at least three companies - VT Group, formerly Vosper Thornycroft, General Dynamics of the US, and French group Thales - to sound out their interest.

The prospect of shedding the 'old technologies' would have a liberating effect on BAE's share price and would make it more attractive to any American aerospace company wanting to merge with Britain's major defence player.

But it is understood that the yards, which make an annual profit of only £7m on revenue of about £750m, may raise about only £100m compared with a rumoured price tag of up to £400m.

VT does not want to buy or be responsible for the BAE Systems nuclear submarine yard at Barrow-in-Furness, Cumbria. Instead, it wants to become the nation's premier naval shipbuilder by buying BAE Systems' yards on the Clyde.

Executives at the company, which has recently opened a yard in Portsmouth, say they want to keep the 3,000 Clyde workforce intact and have no intention of cutting jobs in Scotland.

BAE Systems paid only £1 for the Govan yard in 1999 when it was sold by stricken Norwegian shipping group Kvaerner.

A spokesman for VT Group declined to discuss the issue.

The Government, which ultimately controls BAE's future through its super-voting 'golden share', is unlikely to stand in the way of a British-led bid for Govan.

However, suggestions that it is prepared to block BAE from selling its nuclear submarines to a foreign buyer are believed to be wide of the mark.