Meggitt cash call for Dunlop buy

DEFENCE manufacturer Meggitt hit the market with a deeply discounted rights issue today to fund its £408m cash acquisition of the aerospace group Dunlop Standard.

The deal sees venture capital house Doughty Hanson - which also recently floated the Umbro sportswear group - finally get away the sale of Dunlop Standard Aerospace, which has been on its books for nearly a decade.

Dunlop Standard is in fact being broken up. Meggitt is acquiring the design and manufacturing business while Dunlop Standard's engine repair and overhaul business is being sold on to Carlyle, a private equity group that specialises in the defence industry and part-owns the Ministry of Defence's former research business, Qinetiq.

Meggitt today said it is raising £181m through a three-for-seven rights issue at 145p a share, a 45% discount to Friday's closing price of 262 1/2p, near to a three-year high.