Talk of pounds 1.3bn bid by Williams key to leap in Chubb shares

Williams Holdings was last night tipped to launch a pounds 1.3bn recommended offer for locks and alarms group Chubb today, five years after it made an unsuccessful pounds 700m bid for the company's former parent Racal. Expectations of a bid from the conglomerate, whose own security arm owns the Yale brand, sent Chubb's shares soaring. Chubb provoked intense speculation yesterday when it issued a statement saying it was in talks that might lead to an offer being made for the company at up to 450p a share but refused to name the bidder. In the market the shares closed 79p higher at 420p, their highest level for three years.

Analysts said a bid for the company was not unexpected following disappointing recent results and speculation immediately focused on a handful of potential buyers including Rentokil Initial, Ingersoll-Rand, Tyco and Republic Industries. After strong profits growth following Chubb's demerger from Racal in 1991, the company had recently failed to live up to earlier expectations.

One analyst said the sale was another example of chairman Sir Ernest Harrison's focus on creating shareholder value. Following the successful demerger of Vodafone in the late 1980s from Racal, Sir Ernest had spun off Chubb and installed David Peacock as chief executive with a remit to cut costs. Now that process was largely complete, a disposal of the company was the logical next step, the analyst added.

Chubb, with sales of about pounds 1bn, has an attractive share of the estimated pounds 25bn world-wide market for electronic and physical security. It has faced difficulties, however, in moving from the relatively low-growth markets of the developed economies to regions with more exciting growth prospects such as China, where the security business is starting more or less from scratch.

Williams has interests in the Far East with its security and fire prevention operations, the two legs of its business it plans to grow at the expense of its low-growth building materials division, the UK part of which it recently sold for pounds 303m.

Although analysts thought a bid from Williams would make strong commercial sense, some questioned whether it would want to make such a large acquisition after recent comments suggesting it planned to spend about pounds 500m on infill purchases. Williams has also indicated it would not issue further new shares to finance its ongoing expansion.

Buying Chubb now, however, was viewed as an opportunistic time to make a bid for a company which will not see the benefit of recent acquisitions for up to two years.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones