15th Jan 2020 12:00
(Alliance News) - Cobham PLC on Wednesday said its shares will be suspended on Friday before being cancelled on Monday as the controversial acquisition of the UK defence firm by a US private equity company edges closer to completion.
The last day of dealings of Cobham shares on the London Stock Exchange is expected to be on Thursday.
The High Court of Justice in England & Wales on Wednesday sanctioned the court scheme, which will be effective when the order is received by Registrar of Companies in London. This is expected to occur on Friday.
Advent International Corp and Cobham agreed to the GBP4 billion merger in July, though the deal was delayed due to national security concerns.
It received scrutiny because of the Advent's lack of experience in the sector and the short-term mindset of investment companies.
The UK government signed off the takeover in late-December after Advent proposed a number of legally binding obligations to protect the UK's interests.
The post-offer undertakings includes Cobham's Communications & Connectivity, Aviation Services UK and Mission Systems UK businesses each maintaining a headquarters in the UK.
Business Secretary Andrea Leadsom, who led the government consultation process, said she was confident the merger would not compromise national security.
Leadsom 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."
Nadine Cobham – daughter-in-law of the firm's founder Alan Cobham – said the decision to approve the deal was "deeply disappointing" and accused the government of "handing control away".
"In Cobham we stand to lose yet another great British defence manufacturer to foreign ownership, through a takeover that would never have been approved by the Americans, French or Japanese, all of whom have taken steps recently to raise protections for their own defence sectors," she said.
Alan Cobham founded the business in 1934 as Flight Refuelling Ltd, specialising in air-to-air refuelling technology.
It was floated in 1985, although the family maintained a large stake.
The deal also received the green light from regulators in the European Union, the US, France, Australia and Finland.
Cobham shares were marginally higher at 164.55 pence each in London on Wednesday midday.
By Eric Cunha; [email protected]
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