Chloride backs £864m takeover offer

CHLORIDE, the former battery manufacturer that now helps blue-chip firms to protect against power outages, today threw its weight behind a new takeover offer valuing the business at around £864m.
By The Newsroom
Published 8th Jun 2010, 10:31 BST
Updated 8th Jun 2010, 10:33 BST

In the latest twist in a long-running bid saga, Chloride said it recommended its shareholders vote in favour of the offer from Zurich-based firm ABB.

The offer increases the pressure on rival Emerson Electric, which failed to win the company's support with a takeover proposal worth 723 million.

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Chloride employs 2,300 people in 15 countries, of which 374 are located in the UK. ABB said Chloride's strength in the area of uninterruptible power supply systems gave it a leading presence in a field where it is not active.

ABB is a specialist in power and automation technologies that enable utility and industry customers to improve their performance. It has 117,000 staff and operates from more than 20 locations in the UK, employing 2,300 people.

Emerson Electric, which is based in St Louis, Missouri, tabled its offer for Chloride in April - two years after it failed with a previous proposal.

The US firm's latest offer was worth 275p a share, compared to the 325p a share in today's recommended offer from ABB.

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Chloride shares jumped beyond the ABB offer price - to 341.8p - as analysts said they had not ruled out the possibility of a counter bid from Emerson.

Seymour Pierce analyst Ian Robertson said: "The bid from ABB is a surprise as ABB has no direct interest in these markets but does have extensive skills, products and market share in electrical power and automation.

"The 325p level is not beyond the figures our calculations have suggested for Emerson to pay and we look forward to hearing or seeing their response. The synergies and cost savings available to Emerson are likely, in our view, to be greater than those available to ABB."