Business secretary Andrea Leadsom has announced she is “minded to accept” the takeover of air-to-air refuelling specialist Cobham (COB) by US private equity group Advent International, but has accepted pledges from both parties designed to allay concerns over national security.
On 16 September, Cobham shareholders voted to accept Advent’s offer of 165p a share, which represented a 34 per cent premium to the shares’ closing price prior to the bid. Cobham’s largest shareholder, Silchester International Investors, expressed its disappointment with the offer following its announcement. The Cobham family publicly opposed the deal, expressing national security concerns.
In September, the business secretary referred the deal to the Competition and Markets Authority (CMA) for review, and the CMA submitted its report in October. Cobham confirmed last month that the European Commission, US Federal Trade Commission and Finnish Ministry of Economic Affairs had approved the deal. The takeover is now subject to a public consultation that will run until 17 December.
Ms Leadsom announced that Advent will have to protect sensitive government information and existing security arrangements that currently apply to Cobham. Advent will have to maintain existing contracts and notify the Ministry of Defence (MoD) if there is a material change to Cobham’s services, and refrain from withdrawing from certain services for five years.
Advent will also have to give the MoD prior notice if it intends to sell Cobham, or parts of its activities.
