(Sharecast News) - The Competition and Markets Authority (CMA) will investigate national security implications of Cobham's £4bn takeover by American private equity firm Advent International.
Business secretary Andrea Leadsom on Wednesday issued a European intervention notice to intervene in the UK defence company's proposed sale and called for the CMA to submit a report.
"The Competition and Markets Authority will now investigate and carry out a review on the national security implications of the transaction. They must report back to me by 29 October 2019. The government's goals are to support private sector innovation whilst safeguarding the public interest," said Leadsom.
Cobham's shareholders approved the 165.0p per share deal on Monday.
The FTSE 250 company has developed pioneering in-flight refuelling technology but also offers radar, information warfare systems and satellite, radio, and wireless mobile connectivity products.
It employs around 10,000 people and counts governments across the globe among its customer base, but issued a number of profit warnings in recent years before being forced to raise cash from shareholders and embark on a turnaround programme.
Cobham shares were down 0.6% at 159.50p at 0850 BST.
Russ Mould, investment director at AJ Bell, said some of Cobham's shareholders may be feeling peeved about the announcement.
"Now investors are in limbo until the Competition and Markets Authority reports on the national security implications at the end of October. Although a muted share price reaction - with the shares trading not too far from Advent's offer level - suggests, rightly or wrongly, that the market expects the deal to go through."
5 Jan 2017 12:38
Thursday broker round-up
(ShareCast News) - Royal Dutch Shell B: UBS reiterates buy with a target price of 2500p. Aviva: JP Morgan reiterates overweight, 553p target. B&M European: HSBC reiterates buy with a 350p target. Breedon: Berenberg reiterates buy with a 85p target. Cobham: JP Morgan keeps at neutral with a 175p t
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