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Armed Forces: Qinetiq

My honourable friend the Parliamentary Under-Secretary of State for Defence (Derek Twigg) has made the following Written Ministerial Statement. This Statement updates the House on the successful sale by the Ministry of Defence (MoD) of its entire holding of ordinary shares in QinetiQ Group plc (QinetiQ). QinetiQ was created in 2001 from the majority of the MoD’s in-house science and technology laboratories. Given the market-sensitive nature of the transaction, it was not possible to inform the House in advance of the decision to sell. The MoD announced on 9 September 2008 that it would sell its remaining 18.9 per cent stake, comprising approximately 125 million ordinary shares, in the company. The sale process was completed on the same day through an accelerated book-build process, achieving a price of 206p per share and raising around £254 million (net of estimated costs) for the taxpayer. The price achieved by the MoD represented a discount of 7.8 per cent to the closing price of QinetiQ shares on the day before the transaction. A discount is normal for a transaction of this scale. Between flotation and this sale, the average price of QinetiQ shares in the market was 194p. The Government retain a special share in the company. This provides the Government with the right to block certain activities or ownership that could be contrary to UK defence and security interests or which could threaten QinetiQ’s ability to provide its MoD customers with impartial advice. The sale brings the total raised for the taxpayer from the privatisation of QinetiQ to approximately £830m (net of costs).