ABB Launches GBP860 Million Bid For Chloride; Board Backs Deal
08 June 2010 - 5:04PM
Dow Jones News
ABB Ltd. (ABB) said Tuesday it's launching a GBP860 million
offer for U.K.-based Chloride Group PLC (CHLD.LN), the latest in a
succession of similar deals as the Swiss engineering giant spends
its considerable cash pile.
If successful, ABB's 325 pence-a-share bid would banish St.
Louis-based Emerson Electric Co., which has pursued Chloride at
least twice. Most recently, Chloride two months ago rejected a
GBP723 million takeover proposal--or 275p-a-share--from Emerson as
too low.
"The combination of Chloride's strong position in the
fast-growing medium- to high-power uninterruped power supplies
business with ABB's global reach and complementary power and
automation offering provides significant growth opportunities for
both businesses," ABB Chief Executive Joe Hogan said in a
statement. ABB's offer is 12% higher than Chloride's 289p closing
price Monday. Chloride's shares have gained more than 60% so far
this year amid speculation Emerson would eventually sweeten its
bid, trumping a 8.7% gain in the Stoxx Europe 600 industrial goods
and services index.
Chloride's board backs the deal, and shareholders will receive a
3.3p-a-share final dividend, as proposed by Chloride last month,
ABB said.
For ABB, Chloride is the latest in a string of deals since May,
including software maker Ventyx for more than $1 billion, U.S.
measurement product maker K-TEK for an undisclosed price, as well
as the $965 million attempt to lift its stake in ABB's Indian
subsidiary to 72%, from 52% currently.
Before Chloride and K-TEK, but after the other deals and paying
a dividend of CHF0.51 a share, ABB said it had ample financial
firepower--roughly $5 billion in net cash--to hunt for further
deals.
Monday, ABB's stock, which has declined 2.5% so far this year,
closed at CHF19.22, giving the company a market capitalization of
$38.97 billion.
Analysts said potential rivals for Chloride could include
Schneider Electric SA (SU.FR).
-By Katharina Bart, Dow Jones Newswires; +41 43 443 8043;
katharina.bart@dowjones.com
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