QinetiQ takes float offensive

DEFENCE research firm QinetiQ has appointed Morgan Stanley to advise on a possible flotation. The timing surprised many.

QinetiQ said it has only begun 'the first stage of the process', but when US private equity group Carlyle took a 34% stake in QinetiQ last December, executives set a three-to-five-year horizon for flotation.

The Ministry of Defence retains a 56% stake in QinetiQ and a public sale of its share could raise parliamentary hackles. Some MP's opposed the Carlyle sale, fearing QinetiQ's technology could fall into the hands of US defence firms.

Analysts valued QinetiQ at £1bn, although insiders suggest it is wide of the mark. The firm netted £24.3m on turnover of £777m in the year to March 2003. Last year's results are due later this month.

Carlyle paid £250m for its holding, now 30% after share sales to employees. Its stake could now be worth up to £300,000.

QinetiQ is chaired by Dame Pauline Neville-Jones, former chair of the Joint Intelligence Committee. Former Premier John Major sits on the advisory board of Carlyle Europe.