Cobham Share Chat (COB)

Cobham secures majority of Thrane and Thrane

LONDON (SHARECAST) - Defence technology group Cobham says that the acceptance conditions set out in the terms of its revised offer for Danish satellite communications outfit Thrane and Thrane have now been satisfied.

Since announcing last week that Thrane & Thrane shareholders will be offered DKK435 (Danish Krone) in cash for each share, an increase of DKK15 per share over Cobham's initial offer, the firm acquired a further 159,000 Thrane & Thrane shares, respecting 2.7% of its fully diluted share capital.

The offer is subject to Cobham obtaining more than 50% of Thrane & Thrane’s outstanding share capital. Cobham now owns or has received undertakings in respect of a total of 2,978,934 shares, representing 50.1% of the company.

The newest offer values the share capital of Thrane & Thrane, a manufacturer of equipment and systems for global mobile communication, at around £275m, a 2.6% increase from the initial offer.

“The offer expires on May 21st 2012 unless extended in accordance with the offer document,” Cobham said.

Shares were up 1% at 222p by 15:11 on Tuesday.

http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=20082562

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British satellite technology chiefs are pledging to bring something of Cobham to the state of Denmark. The defence and aerospace supplier has landed a satellite antennae rival, Thrane & Thrane, after a short-lived takeover battle. The acquisition, which has the recommendation of the Thrane board, presents an enlarged Cobham satellite communications threat to industry giants such as Honeywell of the United States. Cobham raised its offer to DKr435 (£47.50) a share from DKr420, valuing Thrane & Thrane at £275m. The British company won over Lars Thrane, the Danish group’s co-founder and its most significant shareholder with a 22% stake, with a promise that future business would come to Copenhagen and not be taken away, says The Times.

Fred Cahill, VP Cobham Antenna Systems, explained: "Cobham has been developing GPR technologies for many years and we continue to provide leading-edge Counter-Improvised Explosive Device (C-IED) capabilities for the most demanding military requirements."

Cobham Wins Orders in Excess of £13 Million in 2012 First Quarter For Ground-Penetrating Radar Systems

LEATHERHEAD, Surrey - Cobham has been awarded a number of orders, totalling over £13M in the first quarter of 2012, to supply Ground-Penetrating Radar (GPR) and support solutions for a number of NATO customers.

The orders will be delivered during 2012 from the Cobham Antenna Systems site in Leatherhead, UK.

Share tip summary

Despite the post-results rally, Cobham's shares are rated below 10 times 2012's forecast earnings, which looks cheap compared with rivals. With an attractive dividend yield, the positive chart pattern and further costs savings to come, the shares are a buy.

© Financial Times Ltd 2012. Investors Chronicle, FT and Financial Times are registered trade marks of The Financial Times Limited.

Concerns about the US, where Cobham generates over half its sales, look priced in too. President Obama's new security priorities "favour Cobham", argues Mr Devaney. Expanding US operations in the Pacific will need its air refuelling systems, satellite navigation and radar antennas. Digitising security services is also big business for the company's surveillance products division, while robots on the ground are hot property.

Moreover, emerging markets, such as Brazil, are becoming more important for Cobham. Non-US defence and security customers now account for 28 per cent of its sales and Cobham has kit on both the Rafale ($165,000) and Typhoon ($1.4m) fighter jets, currently scrapping over a huge deal in India.

Commercial aircraft markets contribute, too. Ramping up production of the Airbus A380 superjumbo ($250,000) and Boeing's 787 Dreamliner (up to $150,000) carrying Cobham antennas and other kit are all to the good.

Mr Devaney is looking "extremely hard" to acquire suppliers with content on the 787, A350 and new fuel efficient A320neo. "There are plenty of targets," he says. A bid for Danish communications equipment company Thrane & Thrane has just been rejected. Strong cash generation could eliminate net debt next year, handing the boss a £700m war chest. Whether he gets a chance to use it is another matter, given persistent takeover rumours

Dwindling military spending in the west sparked a savage de-rating of the defence sector, and Cobham, with its heavy exposure to the Pentagon, still bears the scars. But better than expected results for 2011 indicate that the tide may be turning. What's more, the development of a bullish chart pattern suggests the shares could be fuelled for a rapid recovery.

It's already under way. The 2011 figures showed that cost-cutting had increased profit margins at the core business by 1.7 percentage points to 20.8 per cent, firing underlying pre-tax profit 7 per cent higher to £328m. And £75m of cost savings a year in 2014 – £10m more than planned at no extra cost – should beef up margins further. Significantly, the jump in earnings was "the largest 'beat' of any European aerospace and defence stock yet this reporting season", according to analysts at Deutsche Bank.

Chairman John Devaney expects "some underlying progress this year", probably 1-2 per cent in a market with limited visibility. However, that shouldn't deter investors. Glance at the price chart to see why. Cobham's price repeatedly found a floor around 168p last year, a level that also broke its fall in early 2009, points out Investors Chronicle's technical analyst Dominic Picarda. Having built a solid base in this area over some six months, the price has since turned decisively upwards once more. Its 50-day moving average recently crossed above its 200-day moving average, an event known to chartists as a 'golden cross'. The significance of this event is to confirm the new uptrend – and typically to hail fresh gains

Cobham Sell 12-Mar-12 £83,842.40 Andrew Stevens 38,247 @ 219.21p
Cobham Sell 12-Mar-12 £79,131.51 Warren G Tucker 36,098 @ 219.21p

JP Morgan Cazenove upgrades Cobham from underperform to neutral, target price raised from 189p to 224p.