Top Cobham shareholder to vote against £4bn takeover
Sanderson Asset Management shows its hand a week before investors vote on Advent offer
A leading shareholder in UK aerospace group Cobham has come out against its planned £4bn takeover by a US private equity group, with just a week to go before investors vote on the deal.
Sanderson Asset Management, which ranks as the 11th-largest shareholder in the aerospace and defence company, said it was “inclined to vote against” the offer from buyout firm Advent International.
“We have privately communicated our position to the board along with our desire to see the current management team continue their good work in the event a better offer does not materialise,” the asset manager wrote in a letter addressed to Cobham’s founding family, which has urged shareholders to vote against the takeover.
Investors have been hoping a rival bidder will emerge amid concern that the 165p all-cash offer for Cobham, which is best known for its pioneering air-to-air refuelling technology, undervalues a company whose performance has been improving.
Silchester International Investors, which was Cobham’s largest shareholder when the deal was announced in July, has urged the board to find better deals but has stopped short of declaring it would vote against the deal.
Advent has so far secured the support of investors holding 5.2 per cent of the stock, including Cobham’s management as well as Artemis Investment Management. Sanderson is the first institutional investor to make clear its intentions on how it will vote since Cobham’s board agreed to the takeover.
Shareholders in the FTSE 250 group have until September 16 to decide on the bid which needs the support of 75 per cent of investors. Two influential shareholder advisory groups, ISS and Glass Lewis, last week recommended investors support the takeover.
Cobham’s share price was trading at less than 160p on Tuesday, indicating the market did not expect a rival bidder to emerge. Cobham and Advent both declined to comment on the contents of the letter. Sanderson also declined to comment to the Financial Times.
The FT disclosed last week that Nadine Cobham, whose late husband Michael Cobham ran the company and was the son of the founder Alan Cobham, had written to the top 15 investors arguing the offer significantly undervalued the company’s recovery over the past two and a half years.
In her letter Lady Cobham, whose family owns 1.5 per cent of the company, said recent interim results had “demonstrated that its turnround strategy is beginning to bear fruit”.
Cobham, she argued, was about to “enter a golden age for air-to-air refuelling, with air forces around the world looking to recapitalise or replace ageing air tanker fleets in a potential expansion of demand not seen since the 1970s and 1980s”.
In its letter, Sanderson said: “We broadly agree with your assessment of the offer.”