Cobham family calls for ministers to block £4bn takeover
Letter to defence secretary warns US private equity move against ‘national interest’
The family of the founder of Cobham, the aerospace and defence group, has urged the government to intervene in a £4bn takeover by a US private equity group, arguing it is not in Britain’s “national interest”.
Nadine Cobham, whose late husband Michael Cobham ran the FTSE 250 group and who was the son of the founder Alan Cobham, wrote to defence secretary Ben Wallace and business secretary Andrea Leadsom at the weekend asking them to intercede.
Cobham, a pioneer in air-to-air refuelling technology that is used on every western fast jet and which also works for the Ministry of Defence, last month agreed a £4bn takeover by Advent International.
Cobham’s board, led by chairman Jamie Pike, recommended the all-cash offer of 165p which has been criticised by its largest shareholder as undervaluing the company.
Speaking to the Financial Times on Sunday, Lady Cobham, whose family owns 1.5 per cent in the group, said it had only “just been turned around” under chief executive David Lockwood and that Advent had been “opportunist”.
The private equity group, she said, would reap the benefit of years of investment into Cobham’s refuelling technology.
“[Cobham] has been working on this and perfecting it for years and no one has been able to match us,” she told the FT.
“There is also the employment issue,” she added. “There is a lot of finance in Britain but not many people are producing things any more.”
In her letter dated August 3, a copy of which has been seen by the FT, Lady Cobham wrote that “this acquisition is absolutely not in our national interest”.
She warned that “there are real risks in the takeover to UK security and to important hi tech jobs”.
She highlighted the recent decision by GKN Aerospace to close a factory after the British group was bought by Melrose Industries last year. “I am concerned that assurances given by private equity companies are not worth the paper it is written on, as the recent closure of GKN’s manufacturing plants by Melrose testifies,” she wrote.
Advent has promised to maintain investment in Cobham’s research and development as well as its production sites. Cobham employs 10,000 people around the world, including 1,700 in the UK. The company generates more than 50 per cent of its revenues in the US. The MoD represents less than 5 per cent of its business.
Cobham chief executive David Lockwood rejected any threat to Britain’s interests from the deal. “We don’t see a national interest issue and we don’t see a job threat to the operating assets of the company,” he said.
“I have personal sympathy for a shareholder who has an emotional link as well as an economic link.”
The MoD declined to comment. The existence of the letter was first reported by The Sunday Times.