US offer for Charter looks to trump Melrose

WARWICKSHIRE engineering turnaround group Melrose looks to have missed out in its bid to secure gas and welding equipment group Charter International.

Charter’s board has recommended a takeover offer from the American engineering group Colfax, which values the company at £1.5bn.

Melrose, which had made all the early running, increased its bid earlier this month but it has now been trumped by the US corporation.

Charter’s shares rose strongly on the announcement and the firm said the bid was an attractive offer which reflected the strength of the business and its growth prospects.

The Takeover Panel last week granted Melrose more time to look at Charter’s books before confirming its bid.

In a statement, the panel yesterday said that in view of the offer by Colfax, it was now amending its ruling.

It said its earlier ruling that Melrose must, by September 21, announce whether it would be making a formal offer or not, no longer applied.

It said a new deadline would now be agreed once talks had taken place with all parties.

Melrose has yet to reveal its hand, however, reports yesterday suggested the company may opt to increase its offer.