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U.K. defense firm Cobham weighs takeover of Mercury Systems, shares soar

Published 02/01/2023, 09:38 AM
Updated 02/01/2023, 09:52 AM
© Reuters.  UK defense firm Cobham weighs takeover of Mercury Systems (MRCY), shares soar

© Reuters. UK defense firm Cobham weighs takeover of Mercury Systems (MRCY), shares soar

By Senad Karaahmetovic 

Shares of Mercury Systems (NASDAQ:MRCY), which makes technologies for the aerospace and defense industries, is reportedly a takeover target for Advent International-backed U.K. defense company Cobham, Bloomberg News reports.

The report comes just two days after Mercury Systems reported quarterly results and said it has initiated a review of strategic alternatives.

"The Board has decided to initiate a review of strategic alternatives to enhance shareholder value. There can be no assurance that any transaction will be approved or consummated," the company said in a press release.

Mercury shares are up 13% on Wednesday following the report.

Shonnel Malani, Cobham's Chairman, said today that his company is considering a takeover of Mercury Systems.

"Mercury would be the perfect fit," he said, according to Bloomberg. "There are only two mid-tier players worldwide that service the components for radars, which are Cobham and Mercury."

Activist investors, including Elliott Investment Management and Jana Partners, have pressured the company's management to increase shareholder value.

Cobham was acquired by Advent for about $4.9 billion in 2022.

"Defense spending is increasing and private capital can play a crucial role here," Malani added. "We're not just buying companies, we genuinely want to develop them."

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