Banking

Meggitt’s US suitor defends £6.3bn bid: Parker-Hannifin on defensive

Meggitt’s US suitor defends £6.3bn bid: Parker-Hannifin forced onto the defensive amid slew of criticism


Meggitt suitor Parker- Hannifin has defended its takeover of the defence giant after a slew of criticism from political grandees, including Lord Heseltine.

Parker-Hannifin has vowed to protect UK jobs and factories for years to come in an attempt to get its £6.3billion buyout over the line.

The US giant swooped on Meggitt – which produces parts for F-35 fighter jets – with an 800p per share offer last month, which the defence company’s board has already backed.

Takeover target: US corporate giant Parker-Hannifin swooped on Meggitt – which produces parts for F-35 fighter jets (pictured) – with a £6.3bn offer last month

The approach included a range of promises to preserve Meggitt – such as keeping its headquarters in the UK – to sweeten the deal.

But these were slammed because most only lasted for one year, meaning that the company’s long-term future would still be in question.

Political figures have waded into the commitments, warning that any pledges are likely to be worthless.

Tory grandee Lord Heseltine, who was a defence secretary under Margaret Thatcher in the 1980s, said that he was unconvinced any company could provide ‘cast-iron guarantees for the future’.

He said in August: ‘I’m a total sceptic about any assurances that are given.

‘Companies cannot give the sort of cast-iron guarantees for the future that would be enough to persuade me.’ But Tom Williams, chief executive of Ohio-based Parker-Hannifin, yesterday looked to address Heseltine’s criticisms.

Tory grandee Lord Heseltine said that he was unconvinced any company could provide ‘cast-iron guarantees for the future’

Tory grandee Lord Heseltine said that he was unconvinced any company could provide ‘cast-iron guarantees for the future’

He told the Mail that the company has been emailing the Government’s Business Secretary Kwasi Kwarteng about the takeover and has said it is willing to offer longer and more extensive undertakings.

Williams said: ‘We are very open to talking in more detail with the Government over the content, duration and timing.’ He added: ‘We’ve communicated that to the Business Secretary.’

Williams’ charm offensive comes three weeks before shareholders are due to vote on the Parker-Hannifin deal. 

But Ohio-based Parker-Hannifin could yet be outbid by another US company, Transdigm, which has said that it is considering putting forward a £7billion offer of 900p per share.

Transdigm has until Tuesday, September 14 to make a firm bid or walk away. Proposing undertakings at this stage is highly unusual. Williams said that Meggitt bosses had been keen to secure assurances when they were involved in initial talks.

He said: ‘We understood the sensitivity around defence and security capabilities and wanted to make ourselves dramatically different from other potential buyers.’

Williams added: ‘We’re not a private equity firm, we’ve been in the UK for 50 years, we don’t buy things and divest them by breaking them into pieces. Evaluate us by who we are rather than other transactions.’

Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button