United Technologies revealed as Chubb bidder

United Technologies, the maker of Pratt & Whitney aircraft engines, emerged yesterday as the mystery bidder behind last week's offer for the security group Chubb.

Chubb, the world's third-largest security group, revealed it had received a preliminary takeover approach on Wednesday. The news sent the shares up almost 20 per cent, giving Chubb a market value of £680m at the end of last week.

The identity of Chubb's suitor, an US industrial conglomerate with a relatively low profile in the UK despite the fact that it ranks among the world's 50 largest companies, will come as a surprise to the City. But United Technologies, although it is best known for its engine maker Pratt & Whitney and Sikorsky helicopters, also owns Otis elevators and escalators and Carrier heating and air conditioners.

City sources point out that an acquisition of Chubb, which has sold its eponymous locks and safes business and now focuses on electronic security devices and services, would fit neatly alongside United Technologies' building businesses. With the airline industry in the doldrums in the wake of 11 September, the war in Iraq and the Sars virus crises, the US group has been looking to expand its building side.

Despite falling sales at Pratt & Whitney, the conglomerate reported a 7 per cent rise in first-quarter net income last week to $502m (£318m) as a cost cutting drive by George David, the chief executive, paid off. The company already gets more than half its sales from outside America, and has more than 30,000 employees in Europe.

Shares in Chubb have dived by about 70 per cent over the past year since an agreed deal with Securitas, the largest player in the security systems market, unravelled last May. The Swedish group walked away from the deal after 18 months of talks when news of the merger sent Chubb shares soaring and Securitas stock plummeting.

The size of Chubb, and the £750m of debt and pension deficit it bears, left analysts speculating last week that only larger rivals or private equity players would be able to afford the £1bn plus price tag any deal would entail.

Securitas ruled itself out of the bidding this time, as did Group 4 Falck, the number two player, which has also been linked with Chubb in the past. Rentokil Initial and the US conglomerate Tyco, which owns the alarms group ADT, were mooted possible as contenders in the City. Both groups declined to comment.

However, a number of analysts predicted the most likely bidder would be a private equity firm looking to take advantage of the fact that Chubb's share price has slumped from more than 250p when it demerged from Williams at the end of 2000 to less than 50p last month.

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