Rival bidder throws hat in the ring for Charter

The race to acquire Charter International heated up yesterday after the tool maker said it had been approached by another suitor just weeks ahead of the deadline by which the buyout vehicle Melrose must make a formal bid for the company.

The Takeover Panel has given Melrose until 6 September to either formalise its offer, currently pitched at 840p per share, or walk away for at least six months. But ahead of that, Charter, which has thus far spurned Melrose's advances, said it had begun talks with an unnamed suitor. Its shares jumped 20 per cent to 747p.

Although speculation pointed to Lincoln Electric, which tried to buy the business in 2000, a source said the US group was not bidding for Charter.

Melrose raised its bid for Charter, which has come under pressure from shareholders to open its books, to 840p from 780p last month. The initial approach in June came in the wake of a profit warning that led to a sell-off in Charter's shares. Shortly afterwards, Charter also announced the departure of its chief executive Michael Foster. Just days later, investors were greeted with the news of bid interest from Melrose, with Charter labelling the approach as "opportunistic".