Charter International receives £1.3-bn takeover approach from Melrose

Howden, the buoyant engineering firm near Glasgow, is to get new owners after its struggling parent, engineering firm Charter International received a £1.3-billion takeover approach from buyout specialist Melrose yesterday.

However, analysts have predicted emergence of rival bidders.

Howden makes air and gas handling equipment and accounts for a third of Charter's revenue.

Charter's chief executive, Michael Foster, bowed out last week after the group's shares plunged 25 per cent on a profit warning triggered by problems at its other UK business, welding tools unit ESAB.

According to some analysts the company might now look to split Howden away from ESAB in a bid to unlock more value. They say there was no obvious synergy for having those two businesses under the same corporate umbrella.

Howden's order book stands at a record £600 million and next month, the company would see the retirement of chief executive Bob Cleland, who took over in 1999, two years into Howden's acquisition by Dublin-based Charter.