The bid battle for industrial group Charter is hotting up.
Predator Melrose has raised its cash and share offer from 780p to 840p, valuing Charter at around £1.4bn. The deal is conditional on financing and due diligence. Charter, which dismissed the original offer as opportunistic, said it was considering the new proposal. In the market Charter shares have climbed 15.5p to 832.5p, while Melrose is up 2.7p at 364.7p, suggesting the market believes the deal may now be done.
However Singer Capital Market analysts maintained a rival bid may still be possible, especially from competitors to Charter's ESAB welding division:
Despite the 8% increase in Melrose's approach, it is not necessarily a knock-out bid in our view. We would expect the management of both Lincoln Electric and ITW's welding businesses to be concerned about the prospect of ESAB being acquired by Melrose, with its track record of investing in and turning round poorly performing businesses. [We suggest] a maximum price of around 950p per share if Charter were to become the subject of a competitive auction.
