Second suitor makes bid for UK defence firm Meggitt

Defence and aerospace firm Meggitt has confirmed it has received a £7.03 billion offer from a second US rival.

The company, which employs 9,000 people worldwide, including 2,300 in the UK, said it would review the proposal of 900p-a-share bid from TransDigm and carefully consider the terms.

But the board of the Coventry-based firm said it would continue to recommend an offer made by Parker-Hannifin.

Meggitt said: “The board of Meggitt believes Parker’s offer continues to represent an attractive proposition for Meggitt’s shareholders and for its broader stakeholders.”

Shares in the first instantly soared more than 16% to 830p – suggesting some scepticism among investors that a 900p-a-share bid will be accepted.

The UK Government has previously said it is “closely monitoring” the £6.3 billion takeover plan by Parker-Hannifin and pointed out it has the power to intervene in deals that raised national security concerns.

Last week, the Government said: “Under the Enterprise Act 2002, the Business Secretary has powers to intervene in mergers and takeovers which raise national security concerns.

“While commercial transactions remain primarily a matter for the parties involved, the Government is closely monitoring the proposed acquisition of Meggitt by Parker-Hannifin.”

Ministers are already monitoring a proposed takeover of another UK defence firm, Ultra Electronics, by rival Cobham, which is owned by US private equity house Advent.

Meggitt builds parts for aerospace, defence and energy customers including Airbus and BAE Systems, and has contracts with the Ministry of Defence.

Parker-Hannifin has said it will honour the contracts with the UK Government and would maintain Meggitt’s product engineering and manufacturing staff levels in the UK.