Cobham's revised bid pays dividends

FTSE 250 defence technology firm Cobham has won the support of the board of Thrane and Thrane after revising its bid terms for the Danish firm.

Thrane & Thrane shareholders will be offered DKK435 (Danish Krone) in cash for each share, an increase of DKK15 per share over Cobham's initial offer, which was announced on April 10th. The new offer values the share capital of Thrane & Thrane, a manufacturer of equipment and systems for global mobile communication, at around £275m, a 2.6% increase from the initial offer.

The revised offer takes into account the dividend that would otherwise have been declared in June 2012 in relation to the year ended April 30th 2012.

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Lars Thrane, founder of the company and owner of a 22.7% stake in the firm, has signed a binding irrevocable undertaking to accept the revised offer, alongside a number of other board members, meaning Cobham now owns 47.4% of the share capital of Thrane & Thrane.

The Thrane & Thrane board has agreed to recommend the offer to its shareholders.

The British and Danish companies have collaborated in the satellite communications (SATCOM) market for many years and have been talking about a merger for around a year, but Cobham evidently lost patience last month with the pace of negotiations and went hostile with its bid. The two parties have now evidently kissed and made up with John Devaney, Cobham's Executive Chairman, expressing his delight that all it took to secure Thrane & Thrane's agreement to its bid was to allow shareholders to keep the latest dividend.

"Their recommendation will allow us to move quickly, and with certainty, with the integration of Thrane & Thrane into the Cobham group," Devaney said.

"We believe that this is an outstanding opportunity to bring together two world-class, highly complementary, commercially focused SATCOM businesses and is in line with our aim of prioritising investment that will bring more balance between our defence/security and commercial markets," Devaney said.

The plan is for routes to market for the two businesses to be combined so that more customers will have easier access to a wider range of equipment, including highly competitive integrated solutions with equipment from both companies. The business will be able to extend its international reach through a combined dealer network, Cobham's statement said.

NR