New bidder for Charter as sale talks heat up

TAKEOVER target Charter International saw its shares bounce more than 18 per cent yesterday as it said it was in talks with a second potential bidder.

Charter has rejected two offers from investment group Melrose, the highest valuing it at £1.4bn, as too low. But it said it had started talks with another bidder likely to put in a rival offer, in a clear indication it was happy to sell the business.

“The company confirms that it is in discussions with a potential offeror other than Melrose regarding a possible offer for the company,” Charter said in a statement.

The move turns up the heat on Melrose, which has said it requires access to Charter’s books before it could consider raising its 840p per share offer. Analysts expect bids to reach about 900p per share before Charter’s board would sell.

Lincoln Electric, the world’s biggest welder, had been seen as a potential buyer due to its interest in Charter’s welding tools division ESAB, the world number two, but is understood not to be the company in talks with Charter.

The world’s third-biggest welder, Illinois Tool Works, may also be keen.

Lincoln made and then withdrew a 500p offer for Charter in 2000.