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Real-Time news about Charter Intl (London Stock Exchange): 0 recent articles
|stevemarkus: I suspect strength is due to the share price of Colfax which has gone up quite sharply (probably something to do with the latest positive Charter IMS and the market applauding their purchase) - puts the latest expected bid value at about 935p. Of course that's not due to come until sometime in the new year and a lot can happen between now and then, so may be quite a wise move to realise some profits.
|eipgam: Copied from the FT and it's fine team of journos....
Melrose sounds out Charter's investors
By Alistair Gray and Anousha Sakoui
Melrose has begun to sound out shareholders in Charter International about scuppering Colfax's recommended £1.5bn ($2.3bn) offer for the FTSE 250 engineering company, with a view to seeking irrevocable acceptances for a possible counterbid.
The development comes after Melrose's share price fell sharply in recent days relative to Colfax, which has reduced the value of Melrose's indicative cash and shares bid. Shares in Melrose closed down 5.9p at 275.1p on Friday, valuing its indicative bid at 806p a share.
Based on the price of Colfax's New York-listed shares on Friday afternoon, the US company's offer valued Charter at 908p a share.
In spite of the gap which has widened significantly in recent days Charter's two biggest shareholders, Aviva and Schroders, are supportive of a formal bid by Melrose even though Charter's board backs the Colfax offer.
Together, Aviva and Schroders hold about 17 per cent of the shares, which makes it harder for Colfax to reach the 75 per cent threshold to implement the deal by way of a scheme of arrangement as it intends.
Shares in Charter closed down 6½p at 856½p on Friday, a significant discount to Colfax's offer.
Chris Murphy, UK equities fund manager at Aviva Investors, said: "The recent market turmoil has not changed our firmly held view that Melrose is the best manager for the Charter assets.
"Melrose has a demonstrable track record and is conservatively financed. The Colfax bid materially undervalues Charter against what we believe Melrose will deliver in the medium to long term."
Aviva has in recent days become the biggest shareholder in Charter with an 8.7 per cent stake, according to Bloomberg. It also holds 3.5 per cent in Melrose.
Chris Miller, executive chairman of Melrose, met one leading shareholder at the end of this week. Further meetings with shareholders are likely.
Melrose has nearly completed its due diligence, and is close to finalising financing that will allow it to make a formal offer, one person familiar with the situation said. An offer from Melrose is not expected imminently, however.
A person familiar with the situation said the board of Charter could provide informal support for an improved Melrose offer at 5p to 10p less per share than Colfax's offer.
A person close to Charter said: "The offer from Colfax is the only offer that is on the table and the board felt that it was attractive and should be recommended to shareholders. At today's values, it is worth 13 per cent more than the Melrose proposal."|
|andrewhbruce: Melrose is not the sort to walk away easily, depends on how much cash they can extract, too many new shares would be pointless I feel, as the share price would plummet?? It would probably plummet anyway!
Another UK stalwart goes overseas!!|
|grigor: If the MRO offer was a cash offer, the share price would be much closer to the offer price.|
Capped at around a billion dollars, Charter would be sizeable merger for Colfax.In effect ,a reverse takeover that'd suit Charter's management rather well i reckon.Excellent share price performance this year.CFX up some 27% on NYSE.
"The Company expects the acquisition, if completed, would be significantly accretive to earnings on a fully diluted basis(1) and would achieve a double-digit return on invested capital within three to five years"|
|steeplejack: As far as Melrose is concerned,Charter is a pretty large morsel.Given that it's anticipated to construct a bid constituted of perhaps 70% paper,perhaps the market fears that a weak share price could ultimately scupper a definitive offer but i consider that unlikely.If due diligence confirms Charter's attractions, i don't see Melrose backing off and i don't see banking finance being a problem.Moreover,we know that Melrose has hardcore institutional support especially from the cross-holding quarter.The hedge funds of Charter might be a bit skittish and can be expected to go with the highest bidder but they're keen a deal gets done.
The only reason i can see for a weak Charter price is that the bidder currently in talks hasn't any great credibility ie perhaps it's a private equity consortium which will have to go through all the complications of stripping this out to sell to a Lincoln etc etc.However,even that doesn't explain why the price is some 20% lower than indicated bids.The market seems simplistically to have observed that Melrose's price is some 20% lower and adjusted the indicated terms accordingly.Perhaps they're right but i'd be very surprised even in these traumatised markets.|
|grigor: Just topped up
I'm sure the major shareholders will want the MRO offer at this share price.|
|jacks13: 875p it is then! ;-)
edit: JRR - I notice that Melrose's share price has also risen since the announcement which is counter to what usually happens and does suggest the market thinks Melrose will pull off a cheap deal for itself!
edit edit: Melrose have apparently said that any offer would be a mix of cash and shares, so that muddies the water somewhat. Unless you simply sell into the market of course.|
LONDON (ShareCast) - When Charter International put out a statement yesterday that, although one side of the business accounting for about a third of sales was doing really quite well, the rest had suffered a bit of a slowdown, almost a third of the company's market cap disappeared and the shares ended off 179p at 537¾p. At the present level, the shares are on only eight times' the most pessimistic profits forecast, while the company has been the subject of bid speculation in the past. But not for the nervous, recommends the Times.
The Independent says, Charter was hardly expensive at less than 10 times 2011 earnings before yesterday's share price crash and lower expectations were factored in, putting it at a discount to the sector. After the forecasts are updated, it could look very cheap. But yesterday's statement just isn't good enough. Behind the mangled language, it looks like a company in a bit of a state. Those who haven't bailed out should do so until things have settled, notwithstanding the possibility of a predator putting it out of its misery. Sell, the paper recommends.|
|togglebrush: From The Times
January 30, 2010
extract ... concludes
Overall, Citigroup believes there is "limited" scope for share price falls among UK engineers and thinks the forthcoming full-year results season should be strong. Its preferences are for Charter, Cookson, IMI, Morgan Crucible and Smiths. Bodycote, whose shares it thinks fully valued, is its only "sell".
Charter Intl share price data is direct from the London Stock Exchange