Tory grandee Michael Heseltine slams Cobham takeover and says sale needs ‘proper scrutiny’
- Defence technology manufacturing giant Cobham employs 10,000 people
- It is currently in the midst of a takeover by an American private equity group
- The shareholders vote is on 16 September and takeover needs 75% support
- However Heseltine is the latest in a chorus of critics who argue the deal could damage Britain’s defence industry and should be probed
Former defence secretary Michael Heseltine has made a furious intervention in a row over the £4bn sale of defence giant Cobham to an American private equity group.
The Tory grandee, 86, said ‘no other country in the world’ would allow a sensitive takeover to pass without scrutiny, as he called for business secretary Andrea Leadsom to launch a Cabinet committee to probe the deal.
He is the latest in a chorus of critics, including MPs and the company’s founding family, who argue the deal could damage Britain’s national security and high-tech defence industry.
Margaret Thatcher’s former defence secretary Michael Heseltine said ‘no other country in the world would allow serious defence contractors to be sold off without proper scrutiny’
The company employs 10,000 staff and makes a variety of military communications and re-fuelling technologies, including vital radar components and other equipment for army tanks.
Lord Heseltine, who served as industry secretary under John Major and as defence secretary under Margaret Thatcher, said: ‘No other country in the world would allow serious defence contractors to be sold off without proper scrutiny. We are a society that is prepared to sell anything before breakfast. I think that is unwise.
‘I think that the industry secretary with a Cabinet committee should be looking at this, with input from the defence department, Foreign Office and the trade minister. This is a Government matter, not one for an individual minister.’
Last night the Department for Business, Energy and Industrial Strategy said the deal was ‘primarily a commercial matter’. The department is now in talks with buyer Advent International about the ‘economic implications’ of the merger. These would likely include commitments about jobs and the amount of money Advent would invest.
John Myers, a former director at Cobham subsidiary FR Aviation, said: ‘It’s a global, high-tech defence firm and the thought of that being hived off to a private American company that will basically tear it apart is awful.’
Former business secretary Sir Vince Cable added: ‘I certainly want it investigated using powers for looking at takeovers with security implications.’
The ‘disappointing’ valuation has also caused consternation amongst some shareholders. Exchairman Gordon Page said the 165p per share valuation meant the board was ‘giving the company away’. He said the company is worth at least £2 per share, equivalent to a £4.8bn valuation.
The takeover has the backing of Cobham’s board and the deal will go ahead if it secures the support of 75pc of shareholders’ votes on September 16.