Cobham’s £4bn buyout at the hands of US private equity giant Advent took a step closer to going ahead this morning, as business secretary Andrea Leadsom said she is “minded to accept” the buyer’s provisions to address national security concerns.
Advent has offered to make sure existing security arrangements around defence giant Cobham would “continue to be strengthened”.
It will also maintain defence capability and honour its existing contracts with the Ministry of Defence, and let the department know in advance if it plans to stop providing key services.
On top of this, it will let the MoD know if it plans to sell any of the business.
Shares in the firm rose four per cent this morning.
Leadsom said that although she had not made a final decision, she had taken advice from the Ministry of Defence on the measures, and would now run a public consultation until 17 December. After that, she said, a decision would be taken.
Advent’s offer for the defence firm, which is famous for its pioneering air-to-air refuelling technology, was last month backed by 93 per cent of Cobham investors.
However, it has faced stern opposition from the company’s founding family. Lady Nadine Cobham, daughter-in-law of founder Sir Alan Cobham, has railed against the takeover in recent months because she feels it does not value the company highly enough.
The national security concerns have centred around the fact that one of Britain’s most prized defence firms would be owned by a foreign company.
Shonnel Malani, partner at Advent, said: “Following the CMA’s review, we have worked closely with the Ministry of Defence to construct undertakings that would adequately mitigate against any potential national security risks and we welcome today’s decision by the secretary of state to propose to accept those undertakings, subject to consultation.”