Americans target FTSE 250 rivals
Meggitt and St Modwen in their sights
TWO more British firms have been targeted by foreign predators in the latest flurry of pandemic plundering.
defence and aerospace group Meggitt is being circled by US rival Woodward, in a move that threatens to further pummel Britain’s world-leading engineering industry.
And St Modwen Properties has received a £ 1.2bn offer from another American firm, private equity giant Blackstone.
It is the second US private equity approach in just two days after infrastructure group John Laing revealed it was in talks with KKr.
Foreign bidders have swooped on a string of UK firms since the pandemic broke out – including the AA, G4S, power generator provider Aggreko and superyacht servicer GYG.
The Covid-19 outbreak sent markets into freefall in February last year, wiping significant value off many companies which still have not fully recovered.
That has made them appear good value to suitors who have been accused of ‘pandemic plundering’.
Fund manager JO Hambro, the fourth biggest shareholder in St Modwen, is said to be unhappy with the price of the offer from Blackstone and is set to oppose such a deal, according to The Times.
The latest takeover talk sent shares soaring, with Meggitt up 8.3pc and St Modwen 20pc.
Like John Laing, whose shares gained nearly 20pc on Thursday, Meggitt and St Modwen are listed on the FTSe 250, which leapt a record high of 22,775.28.
russ Mould, investment director at AJ Bell, said: ‘Two private equity approaches in two days – one for John Laing from KKr and one for St Modwen from Blackstone – add to a growing list of takeover offers for UK-listed companies, to suggest there is still value to be had. The number of bids suggests that someone, somewhere – be they trade or financial buyers – feel UK companies are still going cheap.’
John Laing, St Modwen and Meggitt shares are all trading at a lower value than before the pandemic struck last year.
The latest string of takeover talks raises fresh questions about whether UK rules are too lax.
Meggitt’s sale would deal another blow to Britain’s engineering and defence industry – which has already been hit by the sale of companies such as Laird and Cobham over the last few years. Based in dorset, Meggitt’s history reaches back to the 1850s, when its predecessor invented hi-tech, pioneering devices such as the first altimeter for the hot air balloon.
The defence and aerospace group has more recently counted industry giants BAe Systems, Boeing, Lockheed Martin and rolls-royce among its customers. And its work includes making parts for Boeing’s 737 Max planes and radar technology on the rAF’s Typhoon fighter jet.
St Modwen has three business divisions – one of which is a logistics arm that has enough land to build 19m sq ft of warehouse space in the next few years.
The boom in online shopping during Covid has sent demand for warehouse space sky high.