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Charter agrees to £1.5bn cash and share offer from US group Colfax, beating rival Melrose

US group Colfax has trumped its rival, British buyout group Melrose, in the battle for engineering group Charter.

Colfax has put in a higher than expected 910p a share bid, valuing Charter at more than £1.5bn. This compared to a raised cash and share offer from Melrose of 850p made at the start of the month.

The Colfax offer comprises 730p a share in cash and 0.1241 new shares, and has been recommended by the Charter board. Colfax said the deal was a transformational one for the company, while Charter chairman Lars Emilson said:

This is an attractive offer for Charter shareholders, reflecting the strengths of both ESAB [welding] and [gas handling group] Howden’s market leading positions and their growth prospects. Colfax has committed to providing continued stability for our employees and continued development of the ESAB and Howden offering for our customers.

There had been some suggestions investors might prefer Melrose’s turnaround plans for Charter, but the market seems to be saying otherwise. Charter’s shares have jumped 50p to 854p, making them the biggest rising in the FTSE 250, but this is well below the new offer price. Meanwhile Melrose is up 15p at 295p as the prospect of a hefty cash call to fund the Charter deal dims. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds