‘Grave risks’ warning on £4bn Cobham deal
THE founding cobham family and a former boss of the defence group have stepped up their attack on its £4bn takeover by a US private equity firm.
They have criticised the 165p pershare offer from advent international for posing a threat to the Uk’s space sector, understating cobham’s importance to the Uk defence industry and putting future research programmes at risk.
Lady cobham ( pictured), the 76year-old daughter-in-law of founder Sir alan cobham, her daughter camilla and former chief executive Gordon Page made their criticisms in a wide-ranging submission to the competition and Markets authority (cMa), which is reviewing the deal.
‘The planned takeover of cobham poses grave risks to national security,’ Lady cobham said.
‘it is vital that the cMa conducts an in-depth investigation into the transaction.
‘ While other countries are responding to growing geopolitical risks by introducing new protections for domestic defence manufacturing capability built up over decades, the Uk seems happy to give it away as long as it can continue to pay bottom dollar for defence equipment.’
advent’s offer was revealed in july. Shareholders last month voted in favour despite widespread opposition from a number of high-profile figures such as Tory grandee Michael heseltine and former head of the Navy, admiral Lord West.
Shortly after the investor vote the Government intervened in the sale, instructing the cMa to prepare a report by october 29 that assesses whether the deal poses a risk to national security. Business Secretary andrea Leadsom will then decide whether to give the merger the green light, wave it through with binding conditions, refer it for an in-depth probe or block it entirely.
The cobhams and Page say if the Uk loses access to the European space programme Galileo, which is building an alternative to GPS, Britain may need to develop its own system.
They argue that the company’s antennae and satellite communication systems may be vital for an alternative programme and that being owned by a US group could put access to this technology in jeopardy.
in addition, they say that cobham’s revenues from the Uk Government could be as much as 15pc – or around double the total the company acknowledges – if its involvement in a firm called air Tanker and its strategic sales overseas are taken into account.
Much of the criticism of advent’s takeover offer has revolved around the fact that it is a private equity firm. These typically aim to own a company for a few years then sell it at a profit.
Before the october 29 deadline, advent could submit a range of commitments around jobs or keeping cobham’s research and technology in the Uk. it could also offer undertakings about what will happen if it sells the company in the future.
cobham said last night that it is assisting the cMa and providing all information required.
advent said it is committed to being a ‘responsible custodian’ of the company.