Chemring increase bolsters defences  in opposition to a potential takeover bid after bumper buying and selling replace

Chemring yesterday bolstered its defences against a possible takeover bid with a bumper trading update and a £40million share buyback.

The bullish update was designed to send a message ‘loud and clear’ to rebuff US private equity firm Bain Capital, said a leading City analyst.

It comes amid fears that a takeover of 120-year-old defence firm Chemring could further hollow out the sector after a rash of overseas buyouts in recent years.

Bain has reportedly submitted a £1.1billion offer for the Hampshire company – but City experts say it is worth at least £1.4billion. Bain and Chemring have yet to comment on the speculation.

But yesterday, in a trading update ahead of its annual general meeting, Chemring said orders were at a record £1.351billion at the end of January, up from £991million in 2024.

Chief executive Michael Ord said it showed ‘continued customer demand and confidence in Chemring’s market-leading products and services’ and meant it had ‘a strong sustainable platform for future growth’.

Takeover target: It is feared that a takeover of defence firm Chemring could spell a further hollowing out of the sector after a rash of overseas buyouts in recent year

He said the share buyback reflected a growing confidence in its long-term potential.

In a statement it stressed that recent global upheavals would only bolster prospects.

‘With the new administration in the US pushing for significant increases in Nato defence spending and with EU member states recognising the critical need to scale up and co-ordinate defence production across Europe, the market opportunity continues to grow,’ it said.

Founded in 1905, Chemring made equipment to change UK street lighting from gas to electric, before becoming a defence engineering specialist. 

Today, it has customers across the world, including the RAF. It is best known for counter-measures used by air forces and naval fleets to repel attacks.

A sale to a foreign bidder would be a blow to a defence sector that has already seen the likes of Meggitt, Cobham, Ultra Electronics and Laird fall into overseas hands.

Russ Mould, investment director at AJ Bell, said: ‘Chemring’s message comes across loud and clear – the business is doing incredibly well; the opportunities are tremendous and investors should be rewarded for their patience.’