Charter gives Melrose the brush-off

30th Jun 2011 13:39

Charter International has rejected a 780p-a-share indicative offer from rival engineering group Melrose. Melrose revealed on Wednesday that it had been in discussions with the company in regards to a potential offer which valued Charter at around £1.3bn, sending the target's shares over a quarter higher.The 780p-a-share proposal represented a 30% premium to Charter's closing price the day before the approach, Melrose said.Having reviewed the proposal with its advisers, Charter announced that it has rejected it as it is "opportunistic and substantially undervalues the company and its prospects.""The board is confident in Charter's strengths and is committed to maximising shareholder value," the statement said.In response, Melrose said it is "disappointed that Charter has declined the opportunity to enter constructive discussions to create value for Charter's shareholders."As of 15:09 on Thursday, Charter was edging 1.08% higher at 795.5p, while Melrose was trading 0.95% up at 360.4p..