01 Apr 07. The recent disappointing performance of Qinetiq’s shares has rekindled talk of whether the former UK Ministry of Defence research laboratory might be better off as part of a bigger company. Several large international defence groups, including Italy’s Finmeccanica, L-3 Communications of the US and Boeing, would like to acquire more UK companies. The problem is that beyond Ultra Electronics, which would be a very expensive acquisition, there is not much available. The MoD retains a 19 per cent stake in Qinetiq. The company’s senior management would be happy if the government sold the stake, especially given the recent controversy over Qinetiq’s success in winning a £16bn ($31bn) project to run the MoD’s military training. However, even if the government sold out of Qinetiq, it would retain a golden share in the company, allowing it to block any takeover it deemed not in the national interest. It has similar shares in BAE Systems and Rolls-Royce, the defence and aerospace groups. A senior industry executive, who said his company would be interested in buying Qinetiq, said the issue was not on the government’s agenda, but could become so next year after the MoD completes much of its restructuring of the domestic arms industry.
Lord Drayson, the minister in charge of Britain’s £16bn yearly military equipment budget, described Qinetiq as a “real 21st century defence company” and said it had excellent prospects, especially in the US. Steve East, industry analyst at Credit Suisse, who believes Qinetiq is undervalued, said he did not think the company was a logical take-out target because it provided a valuable role for the MoD in helping evaluate weapons projects. “If the UK government sold out, it would lose its honest broker and chief
technical adviser,” he said. (Source: FT.com)

30 Mar 07. Finmeccanica has completed the purchase of the remaining 25% stake in Selex Sensors and Airborne. Systems from BAE Systems for a total of around EUR400m, with a further payment estimated at around EUR12m in the next few months. The total price also includes the profits not yet distributed by Selex S&AS that were due to BAE Systems for the whole period of its ownership of
Selex S&AS. The value of this investment, excluding the estimated additional payment, is already included in Finmeccanica’s total net debt figure at the end of 2006 (EUR858m) the transaction does not therefore affect the group’s financial position.

30 Mar 07. An internal investigation into Dell’s accounts has uncovered “evidence of misconduct” and accounting errors, the struggling computer maker said on Thursday night. The news, which prompted a brief fall of more than 5 per cent in the company’s shares in after-hours trading, marked the first mention of wrongdoing since news of Dell’s accounting problems surfaced last year. In August, Dell revealed that US authorities were looking into “revenue recognition and other accounting and financial reporting matters” at the company. Dell on Thursday indicated that its internal probe into the matter was winding down, but revealed nothing about the nature or extent of the errors. It said it was working with its auditors to determine whether any restatements would be necessary. “As we move toward the conclusion of our investigation, we are committing the time and resources required to ensure a thorough and comprehensive review and resolution of all identified issues and the implementation of appropriate remedial measures,” said Thomas Luce, chair of Dell’s audit committee, in a prepared statement on Thursday. Dell declined to comment on the nature of the accounting errors or the misconduct that its investigation had found. Dell’s shares fell as much as 5.6 per cent in after-hours trading after the announcement, underscoring investor concern over potential “deficiencies” in its financial controls. (Source: WSJ)

04 Apr 07. Rolls-Royce has acquired a small US fuel cell business as it steps up its plan to develop a com