Charter urges shareholders to accept Colfax offer
GAS and welding group Charter International, former target of Warwickshire engineering turnaround specialist Melrose, has urged shareholders to accept the offer for the company submitted by US-based Colfax Corporation.
Colfax’s offer values Charter at approximately £1.528bn, equal to 910p per share.
In an interim management statement today, Charter’s board said it unanimously recommended that shareholders vote in favour of the offer.
Melrose, which had been the front runner to acquire the group, pulled out of the running when Colfax increased its offer.
Charter, which has a base in the Black Country through its Hodwen operation, said trading during the period from July 1 to October 27 had been in line with expectations.
For the third quarter to September 30, 2011, Charter recorded revenue of £497.7m (2010: £415.2m), adjusted operating profit of £34.8m (2010: £26.8m) and adjusted earnings per share of 14.9p (2010: 12.1p).
During the first nine months to September 30, 2011, it recorded revenue of £1,444.2m (2010: £1,255.6m), adjusted operating profit of £110.0m (2010: £99.5m) and adjusted earnings per share of 48.5p (2010: 44.9p).
At September 30, 2011, Charter had net debt of £137.6m, compared to net debt of £155.3m at June 30, 2011, a reduction of £17.7m.
Gareth Rhys Williams, Charter chief executive, said: “At the interims, we laid out plans for both businesses on growth, margin and working capital, while also being clear that we were exploring all strategic options for Charter.
“The implementation of those plans is progressing well, with ESAB’s cost savings and working capital reductions at least in line with expectations, and ESAB’s customer service in its key European welding consumables business has shown a marked improvement.
“At Howden, we continue to see strong order intake compared to the same period last year and impressive growth in the aftermarket.”
The group’s Howden subsidiary designs, manufactures, installs and maintains air and gas handling equipment for use in the power, oil and gas, petrochemical and other industries. It has a major base in Kingswinford.
