Colfax makes £1.5bn offer for Charter

A £1.5BN bid battle for the UK engineering firm Charter yesterday looked to have been won by American manufacturing company Colfax.

Charter, which is focused on welding, cutting and automation and on air and gas handling, has been the subject of takeover interest for more than two months.

Pump and valve maker Colfax was spurred into action after Melrose raised its offer for the third time and Charter opened its books for due diligence to the UK-based turnaround specialist. Melrose has until September 21 to decide if it will top the US group’s offer.

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The cash and share offer from Colfax, which has been backed by the board of Charter, is worth 910p per share or £1.53bn in total, significantly higher than the 850p offered by Melrose earlier this month.

Colfax said Charter’s Howden division, which focuses on air and gas handling, would complement its own fluid handling operation, while the ESAB business, which provides welding and cutting solutions, offered it a new growth platform.

Lars Emilson, Charter’s chairman, said the Colfax offer was “attractive”, adding the US firm also had a strong reputation for quality brands and taking a long-term view on its businesses. “Colfax has committed to provide continued stability for our employees and continued development of the ESAB and Howden offering for our customers,” he added.

Renfrew-based Howden employs 4,360 staff, of which 810 are UK based, while ESAB has 200 UK employees out of a total of over 9,000.

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Charter can trace its history back to 1889, when The British South Africa Company was formed and takes its name from the Royal Charter granted by Queen Victoria to the company in that year. In 1994, Charter acquired ESAB followed by Howden three years later.

The Colfax bid is a 13 per cent premium to Friday’s closing price and 48 per cent higher than the price in June before Melrose made its first approach.

n Joe Lewis, the Bahamas-based currency trader and owner of Tottenham Hotspur, has made an offer approach for pubs and restaurant group Mitchells & Butlers through his Piedmont investment vehicle.

Piedmont, which already holds a 23 per cent stake in the company, said yesterday it had made a proposal to the M&B board regarding a possible cash offer for the business which the board had indicated it would not currently recommend.