Laird joins the tech exiles

Shareholders in British electronics group laird will find it hard to resist a bid, at an outsized premium, from american private equity outfit advent.

over the last century laird has moved a huge distance from its roots in metal bashing and shipbuilding, which is just as well given what’s happened to heavy industry.

But one can’t but help feel that if private equity is willing to take the group out at an astonishing 72.6pc premium, almost double the 40pc considered generous, there is something curious going on.

Clearly, the value of the company has been greatly mispriced by investors on the london stock exchange. Private equity princelings have spotted a tech opportunity which escaped the notice of our fund managers.

as a result, laird looks as if it will join a lengthy list of UK tech companies including logica (another firm that involved laird chairman dr Martin read), Imagination, WorldCom and others which have chosen to take their chance with Us owners.

admittedly, laird has suffered some bad times. as with Imagination it has found that, in spite of the consumer love affair with apple, the silicon Valley champion is run by ruthless executives who have no problem running roughshod over suppliers.

since its run-in with apple, laird has come roaring back with a turnaround from a £122.3m loss last year to a profit of £57m in 2017. Brokers’ projections suggest another uplift on the way.

Britain may no longer own its own car makers but it punches well above its weight in advanced components for the industry. almost half of laird’s turnover comes from the ‘shark fin’ antennas, the black aerials on the rear of most modern cars.

even more fascinating, as the UK looks beyond europe, the firm’s biggest overseas markets are asia and North america, which makes it just the kind of enterprise that Britain ought to treasure for its technology and global outlook.

as always, a purchase by private equity makes one queasy. What it usually means is piling up the debt, slashing costs and in a company like laird, dependent on control of patents and r&d, sacrificing future growth for quick gains for anonymous wellheeled investors.

laird may not be as important to Britain’s engineering future as GKN. But it nonetheless will be a loss to the nation’s manufacturing heritage, and underlines how little understanding the london market has of home-grown technology pioneers.

WPP stranded

sIr Martin sorrell has proved among the most far- sighted figures in advertising through his understanding that digital media would grab a huge slice of the market in commercials.

To this end he has embraced technology, developed smart media-buying models and recognised the value of marketing data by snapping up enterprises across the world at breakneck pace.

But there are now signs that it could be hoist by his own petard. some of the biggest fast-moving consumer groups have decided that they can disrupt the industry by going directly to the tech giants. Unilever, for example, is having great success in China by moving to a digital sales model.

There will, of course, always be demand for the huge creativity in the big advertising agencies such as J Walter Thompson, Young & rubicam et al.

What sorrell is trying to do is bring his big global clients under the umbrella of unified teams, ending the widely dispersed model he operates. That is an enormous management task for someone who has long preferred a model which has dispersed responsibility and let a thousand flowers bloom.

But revenues are falling, profit margins narrowing and growth stuttering, leading to a troubling 8pc drop in the shares.

The greatest strength at WPP has always been the wisdom of sorrell. as he moves towards his sunset years it also becomes one of the group’s greatest weaknesses.

Melrose grilling

Well done to rachel reeves for stepping into a vacuum by demanding the presence of the Melrose three – Christopher Miller, david roper and simon Peckham – before the Business select Committee on Tuesday, along with GKN boss anne stevens.

The Government’s silence on the impact of GKN’s sale on industrial strategy has been deafening. But, as reeves points out, hostile takeovers are rare events in Britain and this one has enormous implications, not just for employment but for the UK’s engineering, science and research base.

Bring it on.