The UK government mulling stake sale in defence research company QinetiQ: Report

01 July 2008

The UK government is reported to have decided to liquidate its 19 per cent stake in defence research group QinetiQ, raising over £250 million for the Treasury.

According to the Daily Telegraph, investment bank Merrill Lynch is the advisor to the UK government on the disposal of its stake, and has initiated dialogue with a number of institutions about buying portions of the 18.92 per cent stake.

The report says that ministers would not like to see all of the 18.92 per cent shareholding, or a significant chunk thereof, fall into the hands of a single buyer.

Amongst possible buyers rumoured to be interested in the QinetiQ stake sale are Italy's Finmeccanica and Franco-German firm EADS. The paper reports that the UK government could keep a "golden share" to veto a takeover if necessary.

Citing sources, the report says the stake could be offloaded before Parliament breaks for the summer if the Treasury has it way.

The stake sale is said to be a very sensitive issue for the UK government, as it comes after the government's decision to dispose of its remaining 35 per cent in British Energy. '