Counter bid hopes power Chloride stock
POWER protection firm Chloride was last night at the centre of a transatlantic tug-of-war after accepting an £860m takeover bid from Swiss engineering giant ABB.
The 325-pence-a-share deal for the British power back-up equipment maker is expected to flush out long-term suitor American group Emerson, which had a £ 723m offer rejected just six weeks ago.
Emerson was last night ‘considering its position’. But investors are now betting it will come up with a sweeter proposal over the coming weeks, propelling shares in Chloride 55.2p higher to 343.6p – more than 20p above the deal price.
Stockbroker Arbuthnot said: ‘We do not believe that this offer isn’t necessarily the end of the story.’
The investment house believes Chloride could fetch more than £925m, or 350p a share.
One sticking point, however, is the £8.5m compensation Chloride would have to pay ABB if it pulls out of the deal.
The Swiss group admitted yesterday that it been stalking Chloride for the past 18 months, but had to step up its efforts when Emerson came to the table in late April.
Chloride boss Tim Cobbold told the Mail: ‘We got a good offer for a good business and that’s why the board has recommended it.’
By caving in to ABB, Cobbold is drawing a line under nearly 120 years of independence.
After starting life as a battery maker i n 1891, Chloride now makes high-tech kit that protects against power shortages on the London Underground and at Arsenal’s Emirates Stadium.