MPS call for a ‘golden share’ in Meggitt

THE Government should take “golden shares” in defence companies critical to UK national security such as Meggitt to stop them falling to foreign predators, MPS on the defence select committee have said.

The call comes as concern mounts about the £6.5bn takeover of the FTSE 250 company by US rival Parker Hannifin.

Tobias Ellwood, the committee chairman, called for an expansion of the system in which the Government holds a controlling share that can be used to block takeovers.

“Look at the list of competencies that Meggitt has – advanced composites, avionics, sensors … you can easily argue Meggitt has every qualification to be treated the same as golden share companies BAE Systems and Rolls,” he said.

“If we are going to utilise the golden share mechanism, there is a strong argument it should be expanded to other important companies that make critical contributions to UK security. Mark Francois, the former armed forces minister and another MP on the defence committee, said: “If you project this forward only Rolls-royce and BAE, because of the golden shares, and possibly Babcock, could be left – everything else could be sold overseas.”

The Government only has golden shares in BAE Systems and Rolls-royce, although there are controls relating to Babcock’s Devonport and Rosyth shipyards that maintain much of the Royal Navy, including Trident submarines.

On Monday Us-based Parker revealed an 800p a share offer for Meggitt, which supplies parts for both military and civil aircraft.

Its board recommended the all-cash offer, which is at 71pc premium. The chairman, Sir Nigel Rudd, said he was confident Parker would be a “responsible steward of Meggitt”.

Paul Killik, whose Killik & Co firm administers assets of £8bn and has clients holding £2.5m in Meggitt shares, said: “Our defence sector is being hollowed out.”