Westland Holders Reject UTC Offer : 65% Vote to Accept Bid but 75% Approval Is Required
Shareholders of Britain’s financially troubled Westland helicopter company Friday rejected a bid from United Technologies to buy a 30% stake in the company, overriding the advice of Westland’s board and the wishes of Prime Minister Margaret Thatcher’s government.
Sixty-five percent of the stockholders voted to accept the American firm’s bid, short of the 75% required.
After a week in which anonymous buyers purchased large chunks of Westland stock, United Technologies’ offer was successfully blocked by backers of a consortium of West European helicopter companies that had made their own bid to purchase a minority stake in Westland.
After the ballot, Westland Chairman Sir John Cuckney called on the Europeans to let their offer lapse and yield to the desires of the majority of stockholders. “Don’t destroy Westland by attrition,” he said.
A spokesman for the European consortium said member companies would have to meet to discuss the results of the vote before deciding on their next move.
Bitterly Contested Battle
The stockholders’ vote marks the latest development in one of the most extraordinary and bitterly contested financial battles to grip London’s business district in decades.
It has been a struggle largely overshadowed by the political fallout that has caused one senior Cabinet minister to resign and a second to become embroiled in controversy. And it has confronted Thatcher with her most serious domestic political crisis since winning reelection 2 1/2 years ago.
United Technologies officials indicated that they are still interested in buying a share of Westland, a move that would give the company a direct presence in Western Europe. The Connecticut-based company, in conjunction with its partner, Fiat of Italy, had offered $102 million for 30% of Westland’s equity.
“We want to give the (Westland) board time to see what happens next,” United Technologies Vice President William Paul said.
The European consortium was hastily patched together by British Defense Secretary Michael Heseltine, who believed that U.S. participation in Westland would turn the company into a minor offshoot of a big U.S. corporation and also endanger Europe’s ability to compete technically in the helicopter field.
The issue reflected a mounting level of concern among some West Europeans that, if they are to remain competitive with the United States and Japan, they must join forces to achieve the economies of scale necessary to support greater commitments to research and development.
Resigned From Cabinet Last Week
Heseltine resigned from Thatcher’s Cabinet last week over the issue.
Trade and Industry Secretary Leon Brittan, who supported the United Technologies bid, has come under fire for allegedly misleading Parliament on the matter. He has said he will “certainly not” resign.
Although the terms of the European bid were apparently better--including more money and a guarantee to Westland of more work--the Westland board refused to submit the bid to stockholders.
Instead, it strongly recommended acceptance of the United Technologies package, which, it apparently believed, offered access to better technology and a continuity in design philosophy. Westland has built helicopters under license from what is now the Sikorsky division of United Technologies since the late 1940s.
The warmth of relations between United Technologies and Westland managements also contrasts sharply with the district coolness that exists between Westland and its European counterparts.
Westland, Britain’s only producer of military helicopters, ran into financial trouble after failing in its first venture into commercial markets.
