Melrose eyes Charter with surprise offer
TURNAROUND investor Melrose yesterday confirmed it had made an unsolicited approach to buy underperforming engineering group Charter International for £1.3bn.
Melrose said it approached Charter’s board on Tuesday to open discussions about a 780p per share offer for the group – a 30 per cent premium over Monday’s closing price.
Dublin-based Charter, which owns welding business ESAB and air and gas handling arm Howden, has issued three profit warnings since November and its chief executive Mike Foster walked out on Tuesday following its trading update last week.
Charter said the approach was “highly preliminary, conditional and opportunistic” with no guarantee of an offer being made.
But investors welcomed the news, pushing Charter’s shares up 28 per cent to close above the potential offer price at 787p yesterday.
ESAB and Howden have struggled to perform in recent months, with Howden hit by a delay in order placements and ESAB’s performance hurt by rising input costs and competition.
Charter’s shares lost a quarter of their value last week after it warned it may miss its 2011 profit forecasts.
Melrose is an expert in overhauling industrial firms and in June completed the sale of die-cast metals business Dynacast for $590m (£370m).
It has also repeatedly recently said it was keen to make another £500m-£1bn acquisition soon.
ADVISERS: ROTHSCHILD
RAVI GUPTA
ROTHSCHILD
ROTHSCHILD’S managing director Ravi Gupta leads Melrose’s long-time advisory team and has worked on a number of transactions on its behalf.
These include Melrose’s $590m (£370m) sale of die-cast metals business Dynacast in early June to KDI Holdings, a newly incorporated company managed by Kenner, and its 2007 disposal of McKechnie Aerospace to JLL Partners for $855.6m (£523.5m).
Gupta’s experience spans the engineering, manufacturing and service sectors. He was part of the team advising aerospace engineer Meggitt on its $685m (£431m) cash acquisition of Pacific Scientific Aerospace in January, and led the sale of the Board of St Ives’ magazine business to Walstead Newco3, a wholly owned subsidiary of Walstead Investments for £20m.
In 2008 he was also part of the team who advised the Manitowoc Company’s acquisition of Enodis, creating a combined food service segment with annual revenues of nearly $2bn.