Charter opens books after Melrose ups indicative offer

1st Sep 2011 07:09

Melrose, the engineering firm, has upped the price it is willing to pay for rival Charter International by 18 pence per share, valuing the firm at around £1.43bn.Melrose says it is upping its current offer from 840p per share to 850p while also including a guarantee to pay an 8p dividend to Charter shareholders that falls due on the second of September.The increased proposal comprises 553 pence in Melrose shares and 297 pence in cash for each Charter share although shareholders will be able to alter the cash to share ratio on a mix and match basis.Melrose intends to raise the funds for the cash element of the offer through a rights issue which will be announced should the company make a formal bid for Charter.Charter says it will now allow Melrose access to its books and both firms have agreed to extend the "put up or shut up" deadline to the 21st of September to allow for due diligence.Once diligence is completed Melrose will decide whether or not to firm up its offer and the Charter board will then have to decide whether to recommend it to shareholders.BS