Melrose bid for Charter gains pace as roadshow moves on

PRESSURE on Charter International mounted yesterday as its investor roadshow to win support for its new chief executive and strategy moved to the US after days of UK meetings.

Charter has rejected two offers from turnaround investor Melrose, but several of its major investors have called for it to allow Melrose to view its books, while Richard Buxton, Schroders’ head of UK equities, told Charter’s chairman Lars Emilson he was “underwhelmed” with the cost-cutting strategy it had presented.

Analysts said investors were likely to take Buxton seriously. “People pay a lot of attention to what he has to say,” said Collins Stewart analyst Mark Wilson. “Our view is that the most likely option is that Melrose is successful at £8.40 or close.”

Charter has been forced to cancel a meeting with minority US investors this week, sources told City A.M., due to the level of interest it has received from its larger shareholders there.

Sources close to Charter, however, said the board was “very much listening to all of its shareholders”.

Schroders holds eight per cent of Charter, so 92 per cent of investors still have to be considered,” one said.

But Melrose sources said Charter’s investors, 30 per cent of whom hold shares in both firms, “don’t feel they have had their questions answered”.