Lady Cobham has called on Ministers to intervene after the US owner of defence giant Cobham launched a major break-up of the £4billion British firm.
City sources said private equity firm Advent had quietly sold off Cobham’s shareholding in a Royal Air Force refuelling company and appointed heavyweight bankers to sell its antenna manufacturing unit for £770million.
Cobham is understood to have offloaded its 13 per cent stake in AirTanker – which provides the RAF with air transport and air-to-air refuelling services – to investors including Rolls-Royce, Airbus, Babcock International and Thales.
City sources said private equity firm Advent had quietly sold off Cobham’s shareholding in a Royal Air Force refuelling company
Separately, investment bankers from Goldman Sachs and NM Rothschild have been appointed to find a buyer for Cobham Aerospace Connectivity.
The division employs about 750 people, many in the UK, and makes antenna systems and radio guidance equipment. If the deal completes it would mark the first major sale agreed by Advent after the Boston-based firm bought Cobham in January.
Advent’s takeover bid was met with fierce resistance from MPs and members of the founding family of the business.
At the time, Lady Cobham – the widow of Sir Michael Cobham, who built the firm over 25 years – argued that it put Britain’s national security at risk as the firm harbours military secrets.
She warned that Advent ‘will break up Cobham and sell off its parts to the highest bidder’ and called for the deal to be stopped by the Government.
However, the sale was given the nod under conditions set out by then-Business Secretary Andrea Leadsom – including the obligation to keep Cobham’s communications business in the UK.
Last night, Lady Cobham told The Mail on Sunday: ‘I am concerned about the obligations Advent had to give to the Government. This is typical private equity behaviour, but they are constrained by serious legal obligations they gave to the Secretary of State.
‘They [Advent] said they would maintain technological expertise in the UK, maintaining headquarters in the UK, and various other obligations. If the potential takeover [of Cobham Aerospace Connectivity] is widened out to international takeovers there is a clear problem with the obligations Advent gave to the Government.’
Lady Cobham – the widow of Sir Michael Cobham, who built the firm over 25 years – has called on Ministers to intervene
Other legal undertakings by Advent included notifying the Ministry of Defence of plans to sell Cobham or any of its businesses, ensuring Government information continues to be protected and telling the Government if there is a material change to key suppliers.
Cobham is one of Britain’s biggest defence and aerospace businesses, employing about 10,000 staff globally, including almost 1,800 in the UK.
The company was formerly listed on the FTSE 250 index. Its refuelling technology remains cutting edge and is used to refuel most of the West’s fighter jets while airborne. The company also plays a role in rehearsals to test the RAF’s readiness.
At the time of the takeover Shonnel Malani, a partner at Advent, said: ‘Advent takes its custodianship of Cobham seriously and we are confident the transaction and undertakings being given on national security, jobs and future investment provide important long-term assurances for both Cobham’s employees and customers.’
But less than ten months after completing its deal Advent has begun breaking up Cobham, raising fears that another foreign predator could buy parts of the company.
Earlier this year The Mail on Sunday revealed the buy-out firm had split Cobham into nine divisions, each with their own board, which bankers said would make it easier for Advent to sell off the company piece by piece.
Lady Cobham added: ‘The Tetra project [a system for communication between energency services], for example, is not meant to leave this country, and the antenna business is involved in covert surveillance. It is absolutely crucial for national security. The buyer needs to maintain the security of the businesses involved.’
Ed Miliband, the Shadow Business Secretary and former Labour party leader, said: ‘The Government has powers to act in acquisitions which raise issues of national security, but instead, this deal was waved through with weak assurances and now the Government is silent on the matter. The industrial strategy isn’t worth the paper it’s written on if Ministers fail to protect businesses in industries of strategic importance for our economy.’
A spokesman for Advent declined to comment. A Government spokesman said: The Government remains in regular contact with Cobham.