. The 92% premium to the undisturbed share price at the end of July represents a startling difference of opinion over Meggitt’s value between its current and prospective owners.
So far, Meggitt’s board is sticking with its support for an $8.6 billion formal bid from another U.S. company, Parker-Hannifin . That included $300 million of annual synergies which, taxed and capitalised, might be worth nearly $2.5 billion in today’s money. Yet TransDigm is offering a carrot that’s twice as big to Meggitt shareholders. A 7% return on investment by 2025, according to Breakingviews calculations based on Parker-sized synergies, suggests it might be overexcited. But that still doesn’t explain why Meggitt investors were so glum before the Americans turned up.