Charter directors try to calm Esab worries: Institutions say they will not accept pounds 260m offer after surge in Swedish company's share price

TOP management at Charter, the diversified industrial group, met yesterday with disgruntled shareholders in Esab, the Swedish welding equipment maker, who complained that the terms of an agreed pounds 260m takeover by Charter undervalue the company.

Three institutional shareholders, Fourth National Pension Fund, Wasa Insurance and Foereningsbanken, together speaking for 17 per cent of Esab's share capital and 14 per cent of the votes, have indicated they will not be accepting Charter's offer.

The offer, which closes on Friday, has been recommended by the Esab board and has been accepted by the company's main shareholder, Incentive, which has 53 per cent of Esab's shares.

Complaints by shareholders that the offer is too low followed an attack on the takeover by unions at Esab, which said last month that the agreed bid threatened the future of Esab's operations in Sweden.

Institutional complaints about the offer have been aggravated by a rise in Esab's share price above the bid value following a surge in half-year results announced on Monday.

Jeffrey Herbert, chief executive of Charter, and fellow directors Nigel Robson and Charles Parker held meetings in Gothenburg yesterday with the disaffected institutions.

The company regards the latest share price rise as an attempt to force Charter to increase its offer. The offer is conditional on Charter gaining 90 per cent acceptances.