25th Jul 2019 08:35
(Alliance News) - Cobham PLC on Thursday said it has reached agreement with an indirect subsidiary of funds managed by US private equity firm Advent International Corp over a takeover deal, valuing the London-listed aerospace and defence firm at GBP4.0 billion.
AI Convoy Bidco, the subsidiary in question, has agreed to pay 165 pence in cash per Cobham share. This represents a 34% premium to Cobham's closing price of 123p on Tuesday, and a 50% premium to the three month volume weighted average price of 110p.
Cobham shares on Thursday were 34% higher at 164.60 pence each, the best performer in the FTSE 250 index.
The company, which makes air refueling and electronic warfare systems, said its directors intend to recommend unanimously that shareholders vote in favour of the deal. The deal was first reported by the Financial Times.
"We have worked intensively over the last two and half years to focus on our customers and our financial and operating performance, and these fundamentals, along with the investment in the business Advent can provide, will enable us to leverage the quality of our products and services. Most of all, this offer reflects the potential for future growth and improving performance, and is an endorsement of our turnaround strategy and our hard working people," Cobham Chief Executive Officer David Lockwood said.
AI Convoy Bidco has received irrevocable undertakings or a letter of intent in respect of a total of 123.6 million Cobham shares representing, in aggregate, approximately 5.17% of Cobham's issued share capital.
Separately, Cobham also released its interim results on Thursday, posting revenue growth but a drop in pretax profit on an absence of divestment gains.
For the six months to June 30, the company recorded pretax profit of GBP60.5 million, down from GBP181.0 million recorded in the year ago period. Revenue jumped to GBP1.03 billion from GBP924.5 million.
Cobham recorded GBP200,000 in losses from divestments versus a GBP216.3 million profit a year ago. Stripping out exceptional items, operating profit increased to GBP107.1 million from GBP95.5 million.
The company retained its annual expectations and resumed its dividend payments, declaring interim payment of 0.4p per share.
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