Colfax in fray for engineering group Charter

US engineering company Colfax is in the process of conducting due diligence with UK's tool manufacturer Charter International for the past four weeks. However, the Virginia-based company is yet to decide whether it would change Charter's management. The company has been mulling a potential move on the group since the start of the year.

Charter can trace its history back to 1889, when The British South Africa Company was formed. It takes its name from the Royal Charter granted to the company by Queen Victoria in that year.

Colfax supplies a broad range of pumps and valves with manufacturing facilities in Europe, North America and Asia
Analysts say the possible cash offer would put pressure on the rival bid by Melrose, which was only recently granted access to Charter's books after it hiked its bid by 18p a share.

Melrose on advice of NM Rothschild had put in a £1.44billion cash-and-share bid, made up of 553p in Melrose shares and 297p in cash for each Charter share.

Colfax, which owns several engineering businesses, in addition to pumping and fluid handling systems, is valued at just £670 million - less than the value of the Charter offer. The company's interest was revealed by The Sunday Telegraph newspaper.

According to a statement by Charter, talks with Colfax were at an early stage.