(Alliance News) - Ultra Electronics on Friday said it is minded to recommend a GBP35.00-per-share takeover approach from former London listing Cobham, which had come knocking several times before.
The FTSE 250 aerospace and defence engineering firm confirmed that on Wednesday it received the non-binding proposal in cash, noting that shareholders would also be entitled to its interim dividend of 16.2 pence announced at the start of the week, making the offer worth GBP35.16 per share.
The takeover offer, together with the interim dividend, values Ultra at around GBP2.58 billion and representing a premium of 63% to its closing price on June 24, the day prior to the start of the offer period. It also marks a 42% premium to Thursday's closing share price of GBP24.70.
Ultra shares were up 33% at GBP32.74 early Friday.
"Having considered the proposal, the board has indicated to Cobham that it is at a value the board would be minded to recommend to Ultra shareholders, subject to consideration and satisfactory resolution of other terms and arrangements, including the establishment of safeguards for the interests of Ultra's stakeholder groups," said Ultra.
The latest approach follows a number of earlier proposals, Ultra noted, the first of which was made on June 29 at a price of GBP28.00. The latest offer, including the dividend, is 26% above this initial approach.
Ultra said there can be no certainty a firm offer will be made. The put-up-or-shut-up deadline for Cobham is August 20.
The London-based firm added: "Cobham has indicated to the board that it is minded to offer the UK government appropriate undertakings in respect of national security."
Cobham has its headquarters in Bournemouth, Dorset. It was purchased by US private equity firm Advent International Corp at the start of 2020 for GBP4 billion.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 7,004.74
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Hang Seng: down 1.4% at 27,350.38
Nikkei 225: Tokyo market closed for holiday.
DJIA: closed up 25.35 points, 0.1%, at 34,823.35
S&P 500: closed up 0.2% at 4,367.48
Nasdaq Composite: closed up 0.4% at 14,684.60
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EUR: flat at USD1.1772 (USD1.1775)
GBP: unchanged at USD1.3754
USD: up at JPY110.32 (JPY110.08)
GOLD: up at USD1,807.33 per ounce (USD1,806.52)
OIL (Brent): up at USD73.60 a barrel (USD72.84)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
Japan Health & Sports Day holiday. Financial markets closed.
0930 CEST Germany flash purchasing managers' index
1000 CEST EU flash PMI
0930 BST UK flash manufacturing and services PMI
0945 EDT US flash manufacturing PMI
0945 EDT US flash services PMI
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UK retail sales returned to growth in June as supermarkets benefited from the Euro football championship, figures from the Office for National Statistics showed. Retail sales by volume were up 0.5% month-on-month in June, ahead of the market forecast of 0.4%, according to FXStreet, and rebounding after a 1.3% decline in May. The largest contribution came from food stores, where volumes rose by 4.2%. "Feedback from some retailers suggested that sales were positively boosted in June by the start of the Euro 2020 football championship," the ONS said. Conversely, non-food stores reported a fall of 1.7% in monthly sales, their first month-on-month fall since the start of the year. Sales in June were up 9.7% on a year ago and 9.5% higher compared with the pre-pandemic levels of February 2020.
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BROKER RATING CHANGES
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EXANE BNP CUTS AVIVA TO 'UNDERPERFORM'
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COMPANIES - FTSE 100
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Vodafone reported first-quarter revenue growth, leaving it on track to meet full-year guidance. Total revenue for the quarter to June 30 was up 5.7% to EUR11.10 billion, with service revenue rising 3.1% on a reported basis and 3.3% organically. "I am pleased to report that we are back to service revenue growth in Europe, as well as Africa. This growth was broad-based within both Consumer and Business segments, with the vast majority of our markets contributing," said Chief Executive Nick Read. The telecommunications firm said it is on track to deliver full-year guidance with adjusted earnings before interest, taxes, depreciation and amortisation to be between EUR15.0 billion and EUR15.4 billion. This would compare to adjusted Ebitda of EUR14.39 billion in financial 2021.
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Lender NatWest said it has entered a memorandum of understanding with Permanent TSB as part of its phased withdrawal from Ireland. The memorandum is for the proposed sale of a package comprising performing non-tracker mortgages and performing micro-SME loans, as well as Ulster Bank's asset finance business in the Republic of Ireland and a subset of its branch locations there. The proposed package included approximately EUR7.6 billion of gross performing loans as at March 31. As part of the consideration for the proposed deal, for which financial terms were not disclosed, NatWest will receive a "minority non-consolidating equity stake" in Permanent TSB. "In line with our strategy of a phased withdrawal from the Republic of Ireland, I am pleased that we are today announcing a significant update in the form of this non-binding memorandum of understanding with Permanent TSB. This builds on the recently announced sale of the majority of Ulster Bank's performing commercial banking business to Allied Irish Bank," NatWest Chief Executive Alison Rose said.
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Friday's Shareholder Meetings
Blackstone Loan Financing Ltd - AGM
British Honey Co PLC - AGM
EnQuest PLC - GM re share issue
Personal Assets Trust PLC - AGM
Premier Foods PLC - AGM
Tavistock Investments PLC - GM
United Utilities Group PLC - AGM
Value & Indexed Property Income Trust PLC - AGM
VR Education Holdings PLC - AGM
Kropz PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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