Melrose confirms it will seek diligence on Charter bid
WARWICKSHIRE based engineering turnaround specialist Melrose has confirmed it will not continue its bid for welding and gas handling group Charter International without access to “satisfactory diligence”.
Commenting on speculation that it may bid for Charter without any access to diligence, Melrose said it reserved the right to waive the pre-condition only in the event of a rival bid by a third party.
Melrose confirmed last month it would be bidding for Charter. The deal, which followed a profits warning by Charter, is thought to value the company at around £1.3bn.
In a statement today, Alcester-based Melrose said: “Melrose does not consider it would be appropriate to proceed without access to satisfactory diligence and will not do so. Accordingly, Melrose reserves the right to waive this pre-condition only in the event of the announcement of an offer or possible offer for Charter by a third party.
“Melrose has indicated to the Charter board that with its cooperation it sees this as a speedy, focused confirmatory process.
“Melrose is willing to consider increasing its proposal to reflect any information which demonstrates that it has materially undervalued Charter and justifies such an increase.”
The firm said it reserved the right to waive any other pre-conditions to the offer, adding there could be no certainty any offer would be made even if the pre-conditions were satisfied or waived.
