Signing off UK aerospace
SHAREHOLDERS in Signature, formerly known as BBA Aviation, must be rubbing their hands. The board, headed by veteran wheeler-dealer chairman Nigel Rudd, has held firm, rejecting numerous bids through a tumultuous period when corporate and private jet demand has taken off.
The result of his resistance is the latest offer from New York-based Global Investment Partners, which values the company at 405p a share or £3.43bn.
And that may not be the end of it with Blackstone in partnership with 19pc investor Bill Gates, and another private equity firm Carlyle, in the background.
Signature, provider of support services to private jet operators such as NetJets, controlled by Warren Buffett, is part of a dwindling band of UK firms in aerospace where the UK long held competitive advantage. Among those whose future largely is determined behind closed, private equity doors are Cobham and Inmarsat. Meanwhile, GKN Aerospace is in the relatively safe custody of Melrose having been through the buy and improve stages of ownership and awaiting the clock to wind down so that it can sell.
Rudd has not succumbed in the face of early sorties as has been the case for other recent overseas takeovers such as the Electronic Arts offer for Codemasters, the Canadian-Dutch break-up bid for insurer RSA and the Nvidia offer for Softbank- owned Arm Holdings. But it is hard to forget that Rudd, in spite of all his qualities, has a record of selling rather than building enterprises for the future.
Pilkington, the inventor of flow glass production with a rich history in St Helens, was last heard of in Japanese hands. Boots has become a pawn in Stefano Pessina’s debtheavy global Walgreens pharmacy empire.
If things had gone differently, Boots could have been a flagship ecommerce health and beauty player across the globe. If The Hut Group (THG) can be worth £7.7bn, what could a better invested and more focused Boots be valued at?
Then there is Invensys, one of the UK’s better-rated industrial groups sliced, diced and sold off like salami. We can be thankful that benign French control means the electronics arm bought by Schneider has reappeared on the London Stock Exchange as electronics group Aveva. So not all has been lost. By always placing short-term shareholder value above broader stakeholder and national interest, Rudd has left UK plc a poorer place.
Entente Cordiale
IT took a pandemic to draw attention to the UK’s excellence in science and pharma.
As former Northern Rock chairman turned science guru Matt Ridley argued in the Sunday Telegraph, in spite of all the criticism over test and trace, the UK has ‘sequenced far more viral genomes than any other country’. This made it possible to better understand Covid mutations.
The value of Cambridge-based UK intellectual property is evident in the decision of French pharma group Sanofi to splash out up to £815m on Kymab, and global rights to a discovery known as KY1005. This is described as a fully human monoclonal antibody treatment shown to work in treating some forms of dermatitis. That is a great tribute to the work of Professor Allan Bradley FRS and colleagues, the innovators behind the treatment.
It is also encouraging for investors in Neil Woodford’s Patient Capital, rescued and now in the Schroders stable. It makes the decision of intermediary Link to dispose of the Kymab stake, held by Woodford’s other funds, so speedily look crass in the extreme.
As exasperating is that Sanofi, rather than British pharma, is moving into the driving seat. This, at a moment when Paris, above all others, is determined to make life as hard as possible for the UK outside the EU.
Suited and booted
SINGLE brand outerwear and sports-wear firms have done brilliantly well in the pandemic, including Canada Goose, Lululmelon and Peleton. Now it is the UK’s turn. Seeking to catch the wave on the London Stock Exchange is mods and hipster favourite Dr Martens – with a big online presence – which is being released from Permira captivity with a prospective market valuation of £2bn.
Favoured by model Gigi Hadid and Hollywood actress Kristen Stewart, Dr Martens has caught the imagination of a new generation and the firm has put together a board fit for London’s premium market. With right advice and determination, it can be done properly.