Daily Mail

Another UK tech star set to fall into foreign hands

Its inventions are in Nasa rockets and the Hadron Collider but now E2V is . . .

- by Rachel Millard

A PIONEERING firm that provides the ‘eyes’ for dozens of Nasa space missions has become the latest British tech star to be preyed on by a foreign rival.

The board at Essex-based E2V Technologi­es has agreed to a takeover offer worth about £620m, or £2.75-per-share, from California- based Teledyne Technologi­es.

E2V employs 1,750 across the globe, making products including high-tech cameras, and a range of conductors and sensors for X-ray machines used in hospitals, spacecraft and industry around the world. This takeover attempt is the latest bid by foreign firms to snap up some of Britain’s most creative and world-leading tech firms.

And it puts increasing pressure on Prime Minister Theresa May who made the promise that the country’s most vital firms would be protected from overseas predators. In November Chancellor Philip Hammond pledged more steps to help tech companies amid ‘the long-standing problem of our fastestgro­wing technology firms being snapped up by bigger companies, rather than growing to scale’.

The pledges follow the takeovers in July of microchip designer ARM Holdings by Japanese-owned Softbank and in September of electronic­s maker Premier Farnell – which owns the Raspberry Pi – by US company Avnet.

The attempted bid for E2V has triggered further fears for the home-grown tech industry following the fall in the pound after the EU referendum result.

Shares soared 47.7pc, or 88.5p to 274p yesterday following news of the offer. E2V chairman Neil Johnson said shareholde­rs were recommende­d to accept the ‘attractive’ cash offer, adding the board also wanted to be part of a ‘larger, complement­ary group with enhanced scale and a wider range of capabiliti­es’.

It emerged Teledyne has been plotting a swoop for E2V – which was founded in 1947 – for more a decade.

Robert Mehrabian, Teledyne’s chief executive, said the businesses had ‘become increasing­ly aligned’.

But the concern is that British talent and ideas will leave these shores if the country’s brightest startups are not protected. The Treasury launched a review of financial barriers preventing UK start-ups from scaling up, and has also pledged to increase the amount of services it buys from small businesses, and reduce corporatio­n tax. Former Business Secretary Vince Cable said those measures did not go far enough.

‘My general approach to it is that the public interest test on takeover legislatio­n is far too narrow and there should be a public interest test for anything that affects the long-term science brain of the country,’ he said.

Gerard Grech, chief executive of Tech City UK, a group launched by former prime minister David Cameron to support the tech industry, said: ‘I think if the Chancellor wants to see fewer companies snapped up by an overseas company, there needs to be a continued effort towards optimising better conditions for businesses.’

The Teledyne offer is a 48pc premium on E2V’s Friday closing price. Chief executive Stephen Blair could make around £383,179 from his 139,338 shares.

Andy Douglas, an analyst at Jefferies, said the takeover was a ‘sensible outcome for both parties’.

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