Scott Ferguson's Sachem Head builds stake in Meggitt

A fresh name has been added to the list of players looking to profit from the bidding war for aerospace and defence company Meggitt, with the Sachem Head hedge fund taking a stake of almost 1%.

The Times reported that the fund, which was behind the push for Whitbread to sell its Costa Coffee business, has amassed the holding through derivatives.

It comes after Meggitt agreed to the 800p-per-share takeover offer from US-based Parker-Hannifin earlier in August, before another American company TransDigm swooped in with an unsolicited 900p-per-share bid.

The Takeover Panel in London gave TransDigm a 14 September ‘put up or shut up’ deadline to either make a formal offer, or abandon its bid.

In 2018, Sachem Head made the first calls for Whitbread to offload its Costa operations after building a stake in the company, before activist investment giant Elliott jumped on the bandwagon.

That pressure led to the Premier Inn owner selling Costa Coffee to the Coca-Cola Company for £3.9bn several months later.

Sachem Head, led by managing partner Scott Ferguson, also built up a stake in security giant G4S amid the bidding war between Allied Universal and GardaWorld, which the former won in February of this year.

The Times said Sachem Head had sold down its stake in Meggitt from a peak of 1.7% earlier in August, but said it was just one of several hedge funds looking to profit from the battle for the defence company.

It named Davidsom Kempner, Pentwater and Farallon as being among the firms that have built up holdings recently.