Ultra Electronics, which specializes in equipment used in missiles and naval systems such as sonar, prepares for a takeover bid from U.S. company Advent International after secret talks over a smaller-scale deal fail .
Advent bought another British defense firm Cobham two years ago in a £ 4 billion deal that critics say could harm the country’s security interests. His designs on Cobham are part of a wave of private equity deals as foreign bidders seek opportunities on the London Stock Exchange.
Cobham announced on Friday afternoon its intention to strike a deal with Ultra, saying it “is considering a possible combination to create a world champion in defense electronics.”
Insiders said the two sides had previously discussed a deal in which Ultra would buy Coham’s electronics divisions. Ultra said there was an explicit agreement that talks would not cover company-wide deals, such as a takeover.
Ultra, an FTSE 250 company, ended talks last week after deciding not to proceed with a merger.
The revelation of Cobham’s interest pushed Ultra shares up almost 7% to £ 23.01, valuing the company at £ 1.64 billion.