Cobham sold to US private equity firm...

[Rhino power]

Surprised this hasn't sparked more interest...

Cobham sold to US equity firm (https://www.ft.com/content/3e463652-ae6d-11e9-8030-530adfa879c2)

-RP

[FMTAfterburn]

Time for a shake up, this evil empire will be dismantled. Some individuals should be rightly crapping themselves as they move into an unknown future.

[mopardave]

Surprised this hasn't sparked more interest...

Cobham sold to US equity firm (https://www.ft.com/content/3e463652-ae6d-11e9-8030-530adfa879c2)

-RP

Huh.....how did I miss that.....I'm a bl**dy shareholder!

[RAFEngO74to09]

Under the terms of the deal shareholders will be entitled to receive 165p in cash per share - a premium of 34.4% on the 123p closing price on July 24.

https://markets.businessinsider.com/news/stocks/cobham-agrees-to-be-acquired-by-advent-international-for-gbp-4-bln-1028383604

[ORAC]

Not sold just yet.......

https://www.thetimes.co.uk/article/cobham-takeover-doubts-as-biggest-investor-silchester-rebels-dqptzqxbs

Cobham takeover doubts as biggest investor Silchester rebels

A £4 billion US private equity takeover of Cobham, one of Britain’s largest aerospace and defence companies, was in trouble yesterday after its biggest shareholder told the board that the offer is not good enough and it should think again.

Even before the intervention of Silchester International Investors, which holds more than 11 per cent of Cobham but was not consulted on the offer, the proposed acquisition by Advent International threatened to raise issues for Boris Johnson and Andrea Leadsom, the business secretary, over the sale of global-leading intellectual property and technology to the Americans.......

Cobham yesterday recommended the 165p-a-share, £4 billion takeover, despite recently crashing out of the FTSE 100 after profit warnings and two emergency rights issue fundraisings within a year. Jamie Pike, 64, who has been chairman for less than a month, told investors the offer “represents an opportunity for shareholders to realise their investment in Cobham in cash in the near term”. He said that Artemis Investment Management, a 5 per cent shareholder, was backing the deal.

However, by the end of the day the offer, which needs the backing of investors representing 75 per cent of shares, appeared to be seriously damaged. Silchester, which confirmed that it had not been consulted on the offer, said: “We do not see the current offer as being compelling and . . . would encourage Cobham’s board to seek and respond to other parties who might offer better value.”

The offer is pitched at the level the shares were trading at in early 2017 after a fifth profit warning. While Mr Pike insisted 165p was 50 per cent higher than Cobham’s average share price in the past three months, it is less than half the level the shares were trading at before the warnings. The leading City analyst Sandy Morris, of the stockbroker Jefferies, questioned whether the offer fairly valued Cobham’s recovery in the past two years under David Lockwood, chief executive. “We were looking forward to a rejuvenated Cobham. We feel robbed,” Mr Morris said.

Mr Johnson and Mrs Leadsom will have to consider whether the proposed takeover should come under political scrutiny. Last year the takeover of GKN, another leading aerospace company, became a political issue over claims that Britain’s industrial base and heritage was in danger of being dismantled. Before that deal was completed, Greg Clark, then business secretary, secured commitments from the buyer, Melrose Industries, that it would consult with the government in the event of wanting to sell the business.

While the sale of Cobham does not raise national security issues, fears will be raised over the sale of intellectual property, technology and skills to a US private equity group whose raison d’être is to buy companies to sell them on to make returns for their backers. Experts said Advent could be looking at breaking up Cobham, which is a conglomerate of aerospace technologies and aviation businesses, into its constituent parts to maximise its returns.

[Union Jack]

Also running Down Under at https://www.pprune.org/australia-new-zealand-pacific/623920-cobham-going-going-gone.html

Jack

[Saintsman]

I know a couple of people working on the US tanker project.

if that is representative of Cobham’s performance, it doesn’t surprise me that they have gone down the pan.

Sir Alan must be turning in his grave.

[Doctor Cruces]

One day we're gonna wake up and Britain will own nothing of itself.

[Melchett01]

One day we're gonna wake up and Britain will own nothing of itself.

I for one will be significantly happier when rules on FDI are tightened up and the U.K. isn’t up for sale to anybody that feels like it. I hear the Govt is somewhat concerned on security grounds having been seen to fail during the Melrose GKN takeover last year and are keen to avoid a repetition. That said, until the revolving door between government and industry has a door stop put in place, I don’t see how our senior civil servants and politicians will be in any way motivated to stop selling out to the highest bidder regardless of the cost.

[Asturias56]

A but the UK is one of THE Great investors elsewhere melchett - it'll be all that keeps the country afloat post Brexit

If the UK stops people buying home companies then you'll find retaliation

With manufacturing only 10% of activity all that's left will be tourism..................

[Melchett01]

A but the UK is one of THE Great investors elsewhere melchett - it'll be all that keeps the country afloat post Brexit

If the UK stops people buying home companies then you'll find retaliation

With manufacturing only 10% of activity all that's left will be tourism..................

Yes it’s one of the BREXIT conundrums isn’t it. We want to be great again but it involves opening up even more of our dwindling national asset base to foreign companies. I’m sure Boris and Nigel have a plan for it though.

[Asturias56]

Well - its not often a country hands it self over and lets the lunatics run the asylum ...............................

I see Mr Trump is going to offer a trade deal................... :eek:

[Wander00]

I see Tweedledum taking Tweedledee to the cleaners - tears before teatime, let alone bed time.....

[Asturias56]

All that yummy Chlorinated chicken.............................. and you Brits better not try and tax Amazon or Apple or Uber - 'cos they are REAL AMERICAN companies

[pr00ne]

Lot of ill informed rubbish on here. Cobham is not being relocated lock stock and two smoking refuelling hoses to the US, it has just been acquired by a private equity company, a company that has as its sole purpose the acquisition of other companies. It will remain a British headquartered company, it has just had a change of parent company in effect. This is a perfectly normal acquisition, the sort of thing that goes on all the time, and NOT just a one way street either. The UK is a huge inward investor into the US, and defence and aerospace companies figure large in that, in point of fact Cobham themselves have acquired quite a large number of US companies, that will still be run from the UK.

[Pontius Navigator]

So why do all my Amazon bills come from Luxembourg?

Or Microsoft from Dublin?

[Asturias56]

" it has just been acquired by a private equity company"

pr00ne is correct but of course that is EXACTLY teh probelm

The record of PE companies is that they:-

a) cut cost to the bone

b) run off all the experienced (= expensive & bolshy) staff

c) fail to invest in new products

d) load up the debt to pay very large dividend and "fees"

e) sell the best bits for cash

f) take the company public and exit ASAP

g) watch the suckers take a bath as the real situation becomes apparent

[pr00ne]

Pontius Navigator,

Because they are US domiciled companies who have set up European subsidiaries for tax (avoidance) purposes. Vodafone do something very similar.

[pr00ne]

Asturias56,

Some certainly do, a lot certainly do, but many don't. The lot who have just bought Cobham seem a little different and are rather more long term. They have already announced UK investment and are looking to grow the business.

[Asturias56]

I hope they do but the overall record is straight MBA strip/steal/burn

[pr00ne]

Asturias56,

Not really. I spend about a third of my professional time on M & A work, so spend a lot of time with venture capital companies and their being sold or acquired companies, and I think the idea that all they do is strip/steal and burn is an inaccurate tired old lazy cliche.

[Asturias56]

No but an awful lot of the public face of Private Equity is I'm afraid the companies that do go down that route

I hope Cobham are safer - time will tell

[dead_pan]

No doubt the tanking Pound provided more than a little additional incentive. Maybe they should have waited until Halloween - could have got it even cheaper...

[Phantom Driver]

No doubt the tanking Pound provided more than a little additional incentive. Maybe they should have waited until Halloween - could have got it even cheaper...
Absolutely. A lot of talk about continuing inward investment despite the current turmoil . Well , those with deep pockets would be mad not to pile in when there are deals to be had at bargain basement prices . Honda and Nissan may be retrenching , but Jaguar-LandRover are staying put . For the folks at Tata , it's payback time ; what the East India company did to them , they can do the same in reverse . What goes around always comes around .

[Icarus2001]

https://www.bbc.com/news/business-49738885

Some more hurdles, not a done deal yet.

[pr00ne]

Phantom Driver,

What a childish approach to take! If you seriously think that emotions of the kind you allude to play any part whatsoever in global M and A activity then I am afraid that you are sadly deluded. Indian investors in the UK are here for one reason only, a decent return on investment.

Icarus2001,

There has been talk of the bidder being primarily interested in a break up and sell off, if that is the case then the Govt intervention will most probably stop this deal going ahead.

[Asturias56]

Just before Tory Party Conference = high sensitivity to outside pressure

They'll probably ask for Solomon Binding agreements - like Cadbury's.............

[Foghorn Leghorn]

The expectation is for the deal to go through perhaps with some caveats on sovereign technologies.

[Asturias56]

https://www.bbc.co.uk/news/business-50874181

The government has approved a US private equity firm's takeover of UK defence and aerospace company Cobham.

Advent International made a £4bn offer to buy Cobham in July and shareholders approved the deal last month. But Cobham's founding family raised concerns about the security implications of the deal, prompting a government consultation. Business secretary Andrea Leadsom has now said (https://www.gov.uk/government/news/government-update-on-the-proposed-acquisition-of-cobham-plc-by-advent-international) she is satisfied any risks have been mitigated.

Cobham, which employs 10,000 people, is known for pioneering technology enabling the mid-air refuelling of planes. The firm, based in Wimborne, Dorset, also makes electronic warfare systems and communications for military vehicles. Defence experts said its role in air-to-air refuelling is essential for modern warfare and could raise national security issues if the company was sold.

But Mrs Leadsom said the decision had been "meticulously thought over" and came after she took advice from the defence secretary and the deputy national security adviser. She said: "Having considered the consultation responses and further advice from the defence secretary, I am satisfied that the undertakings mitigate the national security risks identified to an acceptable level and have therefore accepted them and cleared the merger to proceed." The business secretary said sensitive government information would continued to be protected under the new owner and existing contracts would be honoured. The company is also obliged to give the government prior notice of any plans to sell the whole, or elements of, Cobham's business.

Cobham has extensive contracts with the British military and is seen as a world leader in air-to-air refuelling technology. Its expertise played a significant role in the Falklands War, allowing the Royal Air Force to attack the remote Port Stanley airfield.

Lady Nadine Cobham, 76, the widow of Sir Michael Cobham, who built the company up over 25 years, had suggested the deal might jeopardise the UK's capacity for mid-air refuelling in the future if parts of the company were sold off by Advent. Speaking earlier this year to the Mail on Sunday (https://www.thisismoney.co.uk/money/news/article-7344727/Cobham-VITAL-defend-Britain-let-foreign-buyer-break-says-Lady-Cobham.html), she said she would not accept Advent's assurances about its plans. "I don't think it would be worth the paper it's written on," she said.

[Easy Street]

Strikes me that the security aspect of this has been totally overblown by the family as a defensive measure against the takeover. Frankly, you could buy AAR components from anywhere as long as they’re made to the appropriate international specification; they’re hardly top secret. Things like missile seekers would be a different story.

Perhaps the only downside of this sale is that it will be just a tiny bit harder to build Tempest without any dependence on US-owned companies and therefore without effective US control of exports. But was that ever realistic? Probably not.

[pax britanica]

Just the start of Boris' January Sale of what little there is left to sell in the Uk.
US Private equity arent known as Vulture funds for nothing

[57mm]

Cool, guys, now for the NHS.....

[Asturias56]

I heard someone say if the family were so damn keen on the company remaining in British hands they shouldn't have floated it and sold their shares......................

[Foghorn Leghorn]

The issue of selling off sovereign technology is not just limited to AAR, it’s also related to Cobham Special Mission - the chaps who provide operational readiness training using the Falcon 20.

[Asturias56]

Someone was saying that Cobham have more operations in the USA than in the UK - I can't see how their technologies (which are cutting edge) are CRITICAL to UK Security tho'. If they were selling off GCHQ or even RR I could see the point but not Cobham

[Lima Juliet]

Cobham’s major business is in the USA - 52% of it - with the UK making up a measly 8%. It’s a global company that does more than just EW training and a few HDUs with spares for AAR. I can’t see any issue here at all?


https://cimg5.ibsrv.net/gimg/pprune.org-vbulletin/2000x1504/d5459c2c_472c_4a94_96d3_aa23e2e9659f_202b77ddbec6e8114f2c135 e20f18f009e36e05c.png

It’s just normal globalisation. The UK’s workers will still stay working here as long as their work is profitable - whether their investors are British, American or from Craplakistan. If their work is no longer profitable, then they will shift their effort to something else, make redundancies or look for natural wastage. That is how business works. If the family were keen to retain it and not jump on the ‘outrage bus’ then why did they sell it in the first place?

[pr00ne]

"Boris" has not sold Cobham because Cobham is not Boris's to sell! This is a perfectly normal M & A transaction, they happen all the time, and while it is true that the UK is THE most open market in this respect, (if this company was French or Italian then their Govt's would never have permitted the sale) there are a whole raft of UK acquisitions of similar US defence companies, in fact Cobham itself bought its US rival Sargent Fletcher some years ago. This is not some one sided sell off, it is normal commercial activity.