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Chloride set for higher bid

EMERSON ELECTRIC, the American manufacturing and technology giant, will this week step up its pursuit of guaranteed power supplier Chloride by increasing its £723m takeover bid.

David Farr, Emerson’s chairman, is said to have spent last week ringing round investors to work out what he would need to pay to get their support for a hostile takeover.

Chloride, which sells guaranteed power supplies to the likes of HSBC and J Sainsbury, has already knocked back a 275p-a-share bid on the grounds it undervalues the company.

That prompted Emerson to go over the heads of Chloride’s board, led by chief executive Tim Cobbold, to see if investors would back a hostile takeover.

Investors told Farr they thought the existing offer was too low, in accordance with the Chloride board. It is understood Farr was told he would need to pitch his offer above the 300p-a-share mark, although some analysts say investors should hold out for an offer as high as 340p.

Shares in the firm, which provides power to its clients when traditional supplies fail, closed up 1.4 per cent on Friday as investors readied themselves for an improved bid.

Chloride’s hand was strengthened when it unveiled better-than-expected full-year results last month, with profits dipping just five per cent to £41.4m despite the recession.

Emerson believes that merging the two companies will create a global leader in the uninterrupted power supply industry.