McDonnell’s Shares Spurt

McDonnell Douglas shares jumped $2.125 to a two-year high of $79.125 Wednesday after the company said it was considering selling 40% of its commercial aircraft business for up to $2 billion to an Asian partner.

Although the St. Louis-based firm’s statement that it was talking to several Asian firms was not new, the disclosure that it anticipates a $2-billion cash infusion from abroad was applauded by securities analysts and investors.

“This strategy makes an enormous amount of sense,” said Howard Rubel, an analyst for C. J. Lawrence, Morgan Grenfell Inc. in New York.

The investor group that would take the minority stake in the commercial operations of McDonnell’s Long Beach-based Douglas Aircraft unit would also be a possible supplier of low-cost aircraft parts to the company, spokesmen said.

Although the company would be giving up 40% of the profit from its commercial division, the cash infusion from the deal would offset that, at least in the short term, said George Podrasky, an analyst at Duff & Phelps Inc. in Chicago.

“If the $2-billion figure is accurate, I would estimate that the company would save $1 a share over the next three years in interest expense,” he said. “I would say this would be a monumental positive for them.”

McDonnell Douglas had $4.8 billion in debt at the end of the third quarter, and the company has said it will have to find an investor to help pay for its new MD-12, which will compete with Boeing Co.’s 747.

While the company talks to potential partners in Asia, it is also entertaining incentive packages from nine different cities in the United States for a site for the MD-12 plant. It has been offered incentives worth $500 million by some of the communities.

McDonnell Douglas is on track to derive 40% of its $19.5 billion in revenue this year from the sale of commercial airliners.