Yahoo Finance US company threatening to gatecrash Meggitt deal hits back at critics
TransDigm has defended its business practices as the US engineer mulls gatecrashing a bid for Meggitt, which is recommending a £7bn offer from Parker Hannifin.
The aerospace and defence group's board is backing an 800p-a-share approach from Parker, but has received a potential 900p approach from another US company, TransDigm.
Kevin Stein, chief executive of TransDigm, refused to discuss whether a formal offer would be made, but hit out at criticism of his company.
TransDigm promotes itself as delivering “private-equity like returns”, raising fears that it would asset-strip Meggitt.
Mr Stein said: “We are not interested in buying companies and stripping them down. That is not our model - we buy to invest.”
Shareholders in Meggitt are being asked to vote on September 21 whether to accept Parker’s offer. The British company has secured a series of assurances from Parker to protect UK jobs and plants, as well as sensitive contracts for the British military.
The Business Secretary, Kwasi Kwarteng, is “actively monitoring” the Meggitt situation, amid fears US ownership of a major British industrial business could erode the UK manufacturing base.
The Takeover Panel has given a September 14 deadline for TransDigm to make an offer or walk away for at least six months.
Shares in Meggitt jumped from 469p to 735p when Parker’s approach was revealed a fortnight ago. When a prospective second bidder was revealed by Meggitt last week, they rose again and closed at 832.8p on Wednesday.
TransDigm “started as an investment vehicle”, Mr Stein said, but now also "emphasises responsible growth and reinvestment mandate - one can’t come without the other”.
Rather than buying companies to break them up, he said that TransDigm “only invests to grow in a socially responsible way - we are not a nameless, faceless business just out to line our pockets”.
At the start of the year TransDigm completed a $1bn acquisition of the “aero connectivity” division of Cobham, the company which was controversially bought by US private equity business Advent two years ago.
Mr Stein said he had a “a friendly call” with Mr Kwarteng about that transaction, saying he planned to triple investment in the business which makes antennas and radios used in aerospace.
The transaction gave him confidence about doing business in Britain, he said, adding “we have zero concerns about doing this in general”, referring to assurances that aero connectivity’s UK operations would be preserved.
Although he said he was unable to discuss any details of a bid for Meggitt, or even whether one would be made, Mr Stein added: “We are not worried about making commitments; we have done it before and will do it again."
