Emerson Electric knocks out ABB in battle for UK’s Chloride
03 Jul 2010
US-based Emerson Electric Co knocked out ABB Group in the highly leveraged battle to buy UK's largest power protection firm Chloride Plc, after the Swiss Group yesterday dropped out of the bidding and Chloride accepted Emerson's £997 million takeover offer. "The boards of directors of Emerson Electric Co. and Chloride Group PLC are pleased to announce that, following further discussions between them, the board of directors of Chloride has resolved that it intends unanimously to recommend acceptance of the cash offer announced by Emerson," Chloride said in a release.
The acquisition brings an end to Emerson's two-year long quest to acquire Chloride, whose products protect against power shortages from Heathrow Airport, to the London Underground, BP and Edf Energy.
But Chloride has not come cheap for the St. Louis, Missouri-based Emerson, which is paying 375 pence a share compared to ABB's 325 pence and a 36 per cent increase over its own April 2010 offer of 275 pence per Chloride share.
In the highly leveraged acquisition, Emerson is paying a 90 per cent premium to Chloride's average stock price since it began bidding in April and is equal to about 22 times Chloride's projected pre-tax income for 2011.
Earlier this week, Emerson shut out ABB by raising its offer to £997 million, trumping an £860 million offer from ABB. (See: Emerson Electric trumps ABB's bid for UK's Chloride with £997 million offer)
After reviewing Emerson's latest offer ABB said yesterday it had decided not to match it.
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