ABB quits takeover race for Chloride
Friday 02 July 2010
Chloride looks set to be sold to its US rival Emerson Electric after a competing bidder withdrew its offer for the FTSE 250-listed power supplier.
ABB, the Swiss engineering giant, said yesterday that while it could "still see considerable value in the combination of ABB and Chloride," it could not match the £997m offer made by Emerson on Tuesday. Until the US group's improved offer, the Chloride board had backed the ABB bid.
The decision to shy away from a bidding war will come as a disappointment to Chloride's shareholders, who had been hoping that a takeover battle would push up the purchase price.
Emerson has been eager to prevent ABB from getting a foothold in the power supply market. On Tuesday, Chloride said that Emerson's bid was superior to the one received from ABB, giving the Zurich-based company 48 hours to match or better the 375p a share bid.
Speculation about a takeover, and the subsequent offers from the two suitors, has pushed Chloride's shares up by more than 80 per cent in the past three months. A number of funds had increased their stakes in the company since Tuesday in anticipation of a higher offer from ABB.
Analysts said yesterday that an 11th-hour counter-bid was unlikely and that Emerson would take control of Chloride after completing due diligence.
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