7th Sep 2021 14:35
(Alliance News) - Meggitt PLC shares tumbled on Tuesday after TransDigm Group Inc bowed out of the running to acquire the aerospace and defence components maker, leaving Parker-Hannifin Corp firmly in the driving seat with its GBP6.3 billion offer.
Cleveland, Ohio-headquartered aerospace manufacturer TransDigm made an approach in August, mulling a bid of 900 pence per share, valuing Meggitt at GBP7.03 billion. Though not a firm offer, TransDigm's tilt was a 13% premium to Parker-Hannifin's 800p per share bid.
Meggitt shares were 11% lower at 742.80p each in London on Tuesday afternoon. The stock had risen 57% in one day alone at the start of August when it accepted the Parker offer. However, Meggitt shares are now back below Parker's 800p bid.
A firm offer from Transdigm will not materialise. Acquiring Meggitt will not lead to "value creation and investor returns", Transdigm conceded.
"We have long admired and studied the Meggitt business and believed that a combination between the two companies could provide value to investors of both companies," TransDigm Chair Nicholas Howley said.
"However, consistent with our disciplined approach to capital allocation, we make acquisitions only when we see a clear path to achieving our investment return goals with a reasonable degree of certainty."
Meggitt in August had said it was considering TransDigm's proposal, though it made clear that its directors continued to "recommend unanimously" the bid by Parker-Hannifin.
By Eric Cunha; [email protected]
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