Houston-based Cooper yesterday said it would not increase its pounds 321m offer for the British group, prompting the board of TLG, Europe's second-largest lighting fitter, to recommend Wassall's pounds 351m bid.
John Riley, the chief executive of Cooper, said: "We have decided that a higher bid for TLG would not provide the return we expect for our shareholders."
The US group had been under pressure to increase its bid since the beginning of this month when Wassall trumped its original 160p-per share offer with a 175p-per share bid. Wassall coupled the approach with an aggressive programme of market purchases of TLG shares that left it with more than 25.5 per cent of the company's capital, well above the 8 per cent acquired by Cooper. The end to the bid battle sent TLG shares plummeting more than 6 per cent to 171.5p. Wassall shares dropped 11p to 226.5p.
Christopher Miller, the Wassall chief executive, said it was "delighted" at Cooper's withdrawal and said the US company's decision made a Wassall victory "very likely". He said there were "no immediate plans" to cut jobs among TLG's 4,000 staff. The priority would be to increase TLG's return on sales to the level of its European competitors. He said he wanted to raise TLG's returns from the current 7 per cent to the 12 per cent posted by Dutch electronics giant Philips, the European market leader.
TLG was spun off from the music group Thorn EMI via a management buyout and floated on the market in November 1994 at 115p. The shares have been underperforming the sector over the past year as overcapacity in the lighting industryreined in earnings.