AN ENGINEERING company which employs people in Dorset has says it is “minded” to accept a £2.6billion takeover bid from the county’s defence giant Cobham.

Cobham had previously been rebuffed in its efforts at a “combination” with Ultra Electronics Holdings, which has sites in Ferndown and Weymouth.

But Ultra Electronics has now said it intends to recommend approval for an offer from Cobham of £35 per share, which values the company at around £2.58billion.

In an announcement to the Stock Exchange, Ultra Electronics said the proposal from Cobham would also include an interim dividend of 16.2 pence per share to be paid in September. It said Cobham had offered £28 per share on June 29.

Cobham considers merger or takeover of Ultra Electronics

The statement said: “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.

“In relation to this, Cobham has indicated to the board that it is minded to offer the UK government appropriate undertakings in respect of national security.

“Accordingly, the board will engage in discussions with Cobham to explore the proposal in further detail.”

It said the Panel on Takeovers and Mergers had agreed to extend the “put up or shut up” deadline – under which Cobham has to confirm an offer or withdraw – until August 20.

“A further announcement will be made as appropriate,” the statement said.

Wimborne-headquartered Cobham said in June that it was interested in combining with Ultra Electronics “with a view to creating a global defence electronics champion”.

Cobham to be bought by American group in £4billion deal

It said then: “Ultra and Cobham both have long heritage as innovators, and share advanced complementary capabilities delivering mission critical solutions to the US, UK and other key allies.”

When reports of the merger emerged, Ultra Electronics said it had been in the “very early stages of exploratory discussions” under a confidentiality agreement. It said it had not received a proposal and that the talks had now been terminated by Ultra.

Ultra Electronics serves the defence, security, critical detection and control markets and is one of the FTSE 250 index of biggest companies on the London Stock Exchange.

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Its site at Innovation House on Ferndown Industrial Estate does work for the energy industry.

Its site at Waverly House on Weymouth’s Granby Estate incorporates work for its maritime, energy and contract electronics manufacturing solutions (CEMS) businesses.

Cobham has been owned by American private equity firm Advent International since the start of 2020, following a controversial £4billion takeover.