Federal Mogul Said Buyout Rumor Is False.(sale to GKN)(Brief Article)

Federal-Mogul Corp., which cut more than 1,000 jobs in February in response to falling demand from U.S. and German automakers, said rumors that it was considering a buyout offer from GNK, the British engineer group are false. The rumor originated from an article in the London Business Times.

The paper said GKN in the process of merging its industrial services operations with Australian group Brambles -- could afford to spend at least 2.0 billion pounds ($2.84 billion) on acquisitions because of its strong balance sheet. In an unsourced report, the paper added that GKN was also considering the possibility of merging with U.S. rivals Textron Inc. or Dana Corp. as it plots its future following the Brambles deal.

In April, Federal-Mogul posted first-quarter sales of $1.45 billion, though its loss from operations was $42.1 million, or 60 cents per share. The company attributed the loss to significantly lower North American demand from its aftermarket and original equipment customers.

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