Advisers to pocket £220m in fees if Advent wins battle for Cobham

THE proposed sale of Cobham will rack up fees of almost £220m for banks and other advisers if the FTSE 250 aerospace and defence firm is taken over by a Us-led private equity consortium.

The deal, which values it at £4bn, will mean charges estimated at £166m to £190m for buyer Advent and £29m for Cobham, according to the scheme of arrangement document yesterday.

Advent expects to pay about £140m to £147m for financing arrangements and corporate broking advice. It lists its bankers and advisers as Citigroup, Credit Suisse and Goldman Sachs.

Legal, accounting and PR advice, along with other services and fees tack between £26m and £33m on to its bill. Cobham is paying a total of £28m for financial advice, and states its bankers as Bank of America Merrill Lynch, JP Morgan Cazenove and Rothschild.

Management at Cobham have recommended investors support the 165pa-share offer – a 34.4pc premium – that was made last month.

David Lockwood, chief executive, said the bid was an “endorsement of the turnaround strategy” he had led, after being installed to revive the company following a series of troublesome acquisitions by previous management.

Advent has secured the support of Artemis, which holds 5.1pc of Cobham, and needs 75pc of the shareholder vote on Sept 16 for the deal to go ahead.

However, Cobham’s largest investor Silchester International, which has a stake of almost 12pc, said it is not convinced by Advent’s offer and that the price is not “compelling”.

The sale will also face scrutiny from Ben Wallace, Defence Secretary, who has pledged to look at the deal to see if it is in the UK’S national interests. He made the promise in a letter to the firm’s founding family after being contacted by Lady Nadine Cobham.