A row has broken out between the trustees of the GEC pension fund and buy-out specialist Edmund Truell’s Pension Corporation over one of the UK’s largest corporate pension schemes.

Telent, the telecoms equipment maker and rump of the former GEC conglomerate that became Marconi, on Tuesday agreed to a £400m takeover by Co-Investment No.5 LP Incorporated (CILP), part of Pension Corporation.

The group’s directors said they had recommended to shareholders that they accept the 600p-a-share offer, an 18 per cent premium to Monday’s closing price.

To strengthen its hand, Guernsey-based Pension Corporation has agreed to buy the 26.4 per cent stake of Polygon investment Partners, the London hedge fund that blocked a deal last year.

But the trustees of Telent’s scheme, which has 60,000 members, said they had not been privy to the offer and were “unaware of CILP’s or Pension Corporation’s plans” for the scheme.

The trustees would seek a meeting with the management of CILP and Pension Corporation “to hear their proposals for scheme funding and security and will also discuss their proposals with the Pensions Regulator”.

Pension Corporation is widely expected to sell on the operating business of Telent, leaving it with the pension fund.

Mr Truell said, “We are equity-funding the deal and no leverage is being put on the operating assets. I cannot think of a more committed or long-term owner than the Pension Corporation.”

The £3bn fund has overshadowed Telent’s business.

The company said there was no certainty “funds in an escrow account set up when Marconi sold its telecoms business to Ericsson in 2005 would be released in the short to medium term”.

The pension fund is in balance on the basis of FRS17 levels, said Pension Corporation.

Telent shares closed up 77p to 587p. Merrill Lynch acted as exclusive financial adviser and corporate broker to CILP while Lazard was exclusive financial adviser to Telent.

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