(Alliance News) - The UK government has ordered a probe into Ultra Electronic Holdings PLC's GBP2.6 billion takeover offer by former London listing Cobham Group Holdings Ltd, on the grounds of national security concerns.
The UK Secretary of State for Business, Energy & Industrial Strategy Kwasi Kwarteng has issued a Public Interest Intervention notice to intervene in the proposed transaction.
As a result, the UK Competition & Markets Authority is required to investigate the proposed transaction and make a report by January 18, 2022.
"The Secretary of State believes that it is or may be the case that the national security public interest consideration specified in section 58(1) and (2) of the Act is relevant to a consideration of the relevant merger situation," the notice stated.
London-based aerospace and defence engineering company Ultra Electronics in July said it had received a non-binding proposal of GBP35.00 per share from Cobham.
This followed a number of earlier proposals, Ultra said, the first of which was made on June 29 at a price of GBP28.00 per share. Cobham had said on June 25 that it was considering a combination with Ultra. Later that day, Ultra confirmed it had held early talks, but said it had terminated discussions.
Aerospace contractor Cobham was once a FTSE 250-listed company before it was bought by private equity firm Advent International in January 2020 in a controversial deal which had sparked debate over UK national security.
Ultra's directors had backed the deal on Monday, which needs regulatory backing in the UK, US, Germany, Australia, Canada, Austria and Turkey.
Shares in Ultra Electronics closed 0.2% lower at 3,364.50 pence on Wednesday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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