Meggitt shares closed 12.1 per cent down today after one of the firms battling to takeover the aerospace company pulled out of the race.

This afternoon US engineer Transdigm said in a statement that it did not intend to make a firm offer for the FTSE 250 firm.

Last month the Ohio-based firm sent Meggitt’s shares soaring by blowing Parker-Hannifin’s £6.3bn bid out of the water with a per-share offer of 900p, 100p higher than its rival had tabled.

Even though Meggitt’s board had already agreed to Parker’s offer, it said that it would review the new, improved deal.

But today Transdigm chair Nicholas Howley said after review the bid for the Coventry-headquartered firm “would [not] meet our long-standing goals for value creation and investor returns”.

He added that the due diligence available was “quite limited”. It had until 14 September to issue a firm offer for Meggitt.

In response, the FTSE 250 firm said that it had provided both suitors with extra due diligence information on request.

“Meggitt engaged on a constructive basis with Transdigm and its advisers in order to facilitate an offer by Transdigm and has provided Transdigm and Parker with equivalent access to both confirmatory due diligence information and management”, it said in a statement.

The decision to pullout clears the way for Parker to complete its takeover. A general meeting to vote on the deal will follow on 21 September.

On a number of other issues, Howley said that Transdigm had reached agreement.

“We reached a memorandum of understanding with the Meggitt Pension Plan trustees, arranged the necessary financing for the acquisition which we anticipated would position us roughly in the range of leverage levels that we have used historically for larger acquisitions, and communicated our willingness to make commitments to HM Government comparable to those offered by the other bidder for Meggitt. 

“However, consistent with our disciplined approach to capital allocation, we make acquisitions only when we see a clear path to achieving our investment return goals with a reasonable degree of certainty.”

The bidding war for Meggitt had raised national security fears in the UK, with ministers urged to intervene in the deal.

It is the latest in a string of high-profile takeover swoops by American firms for UK defence suppliers.

Business secretary Kwasi Kwarteng has already said that the government will investigate a similar deal for fellow FTSE 250 engineer Ultra.