MoD offloads Qinetiq

QinetiQ shares took a nosedive yesterday after the Ministry of Defence announced it would sell the 18.9 per cent stake it retained after the defence technology company was floated two years ago.

The government said that its 124.9m shares would be sold via an “accelerated bookbuild offering to be launched immediately”.

However, it will retain a “special share” in QinetiQ on the grounds of defence-related national interest.

Credit Suisse, JPMorgan Cazenove and Merrill Lynch have been appointed as coordinators and bookrunners, while NM Rothschild has been named as independent financial adviser.

Controversy has surrounded QinetiQ ever since it was privatised in 2003, when a 33.7 per cent stake was sold to private equity firm Carlyle for £42m. Ten top executives reaped colossal rewards when QinetiQ was eventually floated in 2006, valuing the company at £1.3bn, by which time their investment had increased two hundred-fold.

Carlyle has since cashed in all of its shares, and last November, the National Audit Office published a report concluding that the price of the initial stake sold to the group was too low.

The sale of the MoD’s remaining holding is set to net the government a further £275m, although industry experts said a placing in the current market was ill-timed.