MPs try to block VSEL sale

A takeover bid by defence giant GEC for VSEL, the submarine manufacturer, was overwhelmingly opposed by MPs who gave evidence to the Monopolies and Mergers Commission's inquiry, it emerged yesterday.

The weight of political opposition surprised GEC, known for its hard lobbying, and adds to the growing unease about Michael Heseltine's decision to give both GEC and British Aerospace the green light to make takeover offers.

The news comes as GEC and BAe were putting the final touches to their bids, following yesterday's publication of VSEL's profits, which rose 5.7 per cent to pounds 64.5m.

BAe is expected to make a bid worth around pounds 18 a share, though an offer was thought unlikely today. Any offer is expected to have a large share element following the recent strength of BAe's share price.

Meanwhile, 11 of the 12 MPs who gave evidence to the MMC said GEC should not be allowed to bid or that a takeover could restrict competition in the defence industry. These included nine Conservatives.

Mr Heseltine, President of the Board of Trade, over-ruled the MMC, whose report said a GEC takeover would reduce competition and could lead to the Government paying higher costs for warships. Two members of the six- strong team said GEC should be cleared.

Intense lobbying followed referral of the competing bids last year but only one MP supported GEC at the MMC investigation. John Hutton, the Labour MP whose Barrow-in-Furness constituency includes VSEL, diplomatically said the company would benefit from a link with either GEC or BAe.

The other MPs, some with both BAe and GEC interests in their constituencies, were opposed. Robert Atkins expressed "grave concern'' at the implications of a GEC acquisition. Julian Brazier said it would create an effective monopoly. Phil Gallie said GEC should provide binding guarantees to keep open its Yarrow shipyard.

Nicholas Winterton said he was concerned and disappointed that Mr Heseltine went against the majority MMC report. He would be contacting other MPs who gave evidence to see if they could take further action. "GEC is politically as well as commercially powerful, but whether that made an influence on Mr Heseltine I do not know.''

A GEC source said: "Some MPs like to oppose GEC simply because it is GEC. We concentrated our efforts on Mr Heseltine where we thought we would get better value. At the end of the day we got the decision we wanted."

The jump in VSEL profits to pounds 64.5m from pounds 61m was widely expected, but there was a suprise jump in the net cash inflow, from pounds 322m to pounds 411m, because of early payments by customers.

VSEL's cash hoard is highly attractive to BAe, though analysts said the figures did not reveal anything that would significantly alter the terms of a BAe or GEC bid.

The MPs opposed

rRobert Atkins: South Ribble (Con)

rJulian Brazier: Canterbury (Con)

rIan Bruce: Dorset South (Con)

rSir John Cope: Northavon (Con)

rPhil Gallie: Ayr (Con)

rThomas Graham: Renfrew West (Lab)

rJohn Hutton: Barrow-in-Furness (Lab)

rWilliam McKelvey: Kilmarnock (Lab)

rKeith Mans: Wyre (Con)

rGary Streeter: Plymouth Sutton (Con)

rNicholas Winterton: Macclesfield (Con)

rTim Wood: Stevenage (Con)

Start your day with The Independent, sign up for daily news emails
Sport
Tim Sherwood raises his hand after the 1-0 victory over Stoke
footballFormer Tottenham boss leads list of candidates to replace Neil Warnock
Arts and Entertainment
L to R: Hawkeye (Jeremy Renner), Captain America (Chris Evans) & Black Widow (Scarlett Johansson) in Avengers Assemble
film
News
Nigel Farage celebrates with a pint after early local election results in the Hoy and Helmet pub in South Benfleet in Essex
peopleHe has shaped British politics 'for good or ill'
News
news
PROMOTED VIDEO
News
i100
Travel
Suite dreams: the JW Marriott in Venice
travelChic new hotels in 2015
Arts and Entertainment
Sink the Pink's 2013 New Year's Eve party
musicFour of Britain's top DJs give their verdict on how to party into 2015
Sport
Yaya Sanogo, Mats Hummels, Troy Deeney and Adnan Januzaj
footballMost Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

Aren’t you glad you didn’t say that?

The worst wince-and-look-away quotes of the year
Hollande's vanity project is on a high-speed track to the middle of nowhere

Vanity project on a high-speed track to nowhere

France’s TGV network has become mired in controversy
Sports Quiz of the Year

Sports Quiz of the Year

So, how closely were you paying attention during 2014?
Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

From Armstrong and Miller to Pointless
Sanchez helps Gunners hold on after Giroud's moment of madness

Sanchez helps Gunners hold on

Olivier Giroud's moment of madness nearly costs them
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect