Meggitt presses ahead and publishes documents for Parker-Hannifin £6.3bn takeover bid
British defence technology firm Meggitt has published its scheme documents for a recommended £6.3bn takeover by Parker, just five days after it received a proposal for a potentially higher bid from US rival Transdigm.
Meggitt said its takeover panel will announce a deadline by which TransDigm must clarify its intentions in relation to its offer, and a meeting to vote on Parker’s offer is set for September 21.
The FTSE 250 firm also said it expects the acquisition to become effective during the third quarter of 2022.
The British engineering firm’s shares rocketed nearly 60 per cent on the London Stock Exchange the morning after US tech firm Parker tabled some £6.3bn for the firm a fortnight ago.
A bidding war was then launched last week when US aerospace firm Transdigm launched a rival bid of 900p per share to hijack Parker’s, topping it by 100p and valuing the firm at £7bn.
Meggitt chairman Sir Nigel Rudd this weekend said that the government has to be prepared to intervene in a takeover battle for the company to guarantee a commitment on future investment and jobs.
Sir Rudd said any prospective buyer of Meggitt had to give assurances to keep the firm’s Coventry headquarters open and to maintain research and development spending.
Parker’s original bid for Meggitt came with assurances to not break up the company.
Rudd told the Sunday Times that while “clearly, price is important” in the takeover that there should be other considerations in the sale, which the government should keep a close eye on.
“The government could intervene,” Rudd said.
“It’s the government’s job to look after national interests. I’ve always believed that. It’s more difficult for the chairman of a public company to do that, because we have a fiduciary duty.”
Parker’s bid came alongside legally bind commitments in six areas, promising to not break up the firm’s four divisions for at least a year.
The firm also made a commitment to maintain a majority of British board members.
TransDigm, which operates similar to private equity firms and focuses on takeovers, has not yet offered similar assurances.
Meggitt makes almost half of its revenues from defence, with the rest coming from civil aviation and energy.
Any takeover bid could be scrutinised under national security grounds by the government.
Meggitt said it is being advised by Rothschild & Co and Morgan Stanley in relation to the acquisition.
The firm’s shares were down 0.32 per cent as markets opened on Monday.