The chairman of defence technology firm Meggitt has said that the government has to be prepared to intervene in a takeover battle for the company to guarantee a commitment on future investment and jobs.
Sir Nigel Rudd said any prospective buyer of Meggitt had to give assurances to keep the firm’s Coventry headquarters open and to maintain research and development spending.
The FTSE 250 firm is at the centre of a bidding war between publicly listed US aerospace firms Parker Hannifin and TransDigm.
Cleveland-based TransDigm made a 900p per share bid for the British firm this week, topping its rival’s bid by 100p and valuing the company at £7bn.
Meggitt has previously accepted a Parker bid of £6.3bn for Meggitt, which came with assurances to not break up the company.
Rudd told the Sunday Times that while “clearly, price is important” in the takeover that there should be other considerations in the sale, which the government should keep a close eye on.
“The government could intervene,” Rudd said.
“It’s the government’s job to look after national interests. I’ve always believed that. It’s more difficult for the chairman of a public company to do that, because we have a fiduciary duty.”
Parker’s big came alongside legally bind commitments in six areas, promising to not break up the firm’s four divisions for at least a year.
The firm also made a commitment to maintain a majority of British board members.
TransDigm, which operates similar to private equity firms and focuses on takeovers, has not yet offered similar assurances.
Meggitt makes almost half of its revenues from defence, with the rest coming from civil aviation and energy.
Any takeover bid could be scrutinised under national security grounds by the government.
A spokesperson for TransDigm said: “We are a responsible long-term buyer of aerospace businesses.
“The UK is a very important home market for us in which we already own several businesses with more than 2,000 employees across nine sites – so we fully understand the requirements”