Charter International Plc, the British maker of welding equipment, said it’s considering a sweetened takeover approach from Melrose Plc that values the business at about 1.4 billion pounds ($2.3 billion).
Melrose, the U.K. investment firm run by a former team at industrial company Wassall Plc, increased its cash-and-share bid to 840 pence, Charter said in a statement today. That’s 37 percent higher than its pre-approach closing price, and compares with an initial proposal of 780 pence made on June 29.
The approach comes as the welding and automation-equipment maker is in a state of flux after the sudden departure of Chief Executive Officer Michael Foster in June. The company, which is searching for a new CEO, on June 20 signaled full-year profit will be below earlier forecasts and announced a fresh wave of cost cutting.
“They are not as hostile, they don’t seem to reject it outright this time, so it obviously has a better chance of succeeding,” said Jo Reedman, an analyst at Singer Capital Markets Ltd., which is reviewing its Charter rating.
Charter urged shareholders to await further advice from the board and added that the proposal is conditional on financing and due diligence.