Charter at centre of international buyout battle

Posted on 5 Sep 2011 by The Manufacturer

After receiving interest from UK manufacturing buyout firm Melrose and American firm Colfax, Charter has found itself at the middle of a buyout battle.

After Melrose made a third offer of 850p per share for Charter International, a deal seemed to be near. Charter revealed last week that the Maryland-based pump system specialist Colfax has shown interest too. Melrose made a third offer of 850p per share – bringing the offer to the equivalent of £1.4 billion; however this may not be enough.

Colfax said that it would benefit from both Charter’s divisions – the Howden division focuses on air and gas handling and would provide a boost to its existing fluid handling operations, while the ESAB divison, which provides welding and cutting solutions will offer the company a means to expand into new areas of business.

A spokesperson for Charter said: “These discussions are at an early stage and there can be no assurance that they will lead to an offer for the company.”

Singer Capital Markets analyst Jo Reedman said: “ESAB’s operations have underperformed recently, but the business is likely to become a stronger competitor if acquired by Melrose.”

Melrose, which has grown by buying underperforming operations and turning them around, sold its Dynacast business during the first half after the unit posted a 32-percent increase in revenue in 2010.

George Archer