Emerson Takes 19% Stake In Chloride As Board Backs Buyout

Emerson Electric Co. (EMR) said Friday it has bought a 19% stake of U.K.-based Chloride Group PLC (CHLD.LN) on the open market as the other suitor for the company dropped out of the running.

Emerson's announcement came hours after Chloride said its board would recommend shareholders accept Emerson's offer of 375 pence a share, or $1.5 billion in total. The latest offer, made Tuesday, trumped a prior $1.2 billion offer from Swiss engineering giant ABB Ltd. (ABB), a bid which had the support of Chloride's board. But ABB pulled its offer Thursday.

Chloride is a maker of uninterruptible power supply systems that provide emergency power when the normal power source fails.

St. Louis-based Emerson, which makes electrical products and appliances, said in May its fiscal second-quarter profit rose on stronger margins while organic sales fell.

Shares declined 0.4% in recent trading to $43.29. The stock has risen 36% the past year.

 
   -By Nathan Becker, Dow Jones Newswires; 212-416-2855; [e-mail];