ZURICH, July 1 (Reuters) – ABB (ABBN.VX) said on Thursday it would not match U.S. rival Emerson Electric’s (EMR.N) improved cash offer for British group Chloride (CHLD.L), surprising some investors who expected the Swiss group to up its bid.
On Tuesday, Emerson raised an earlier offer for Chloride by more than a third to 997 million pounds ($1.5 billion) in an attempt to trump the company’s agreed 860 million deal with ABB. The Emerson offer valued Chloride at 375 pence per share. [ID:nLDE65S092]
“While we still see considerable value in the combination of ABB and Chloride and have a high regard for the Chloride management team, we must take a disciplined approach when assessing potential acquisitions,” ABB chief executive Joe Hogan said.
Chloride said on Tuesday it believed Emerson’s offer represented a “superior proposal” and, under the terms of an agreement it signed with ABB, had formally notified the Swiss company of this view.
Chloride shares stood at 386 pence at the close of trading on Wednesday, implying investors expected an improved offer from ABB. A deal with Chloride would have allowed ABB into the $8 billion uninterruptable power supply market (UPS), an area in which it has as yet no significant presence. (Reporting by Martin de Sa’Pinto; Editing by Dan Lalor) ($1 = 0.6645 pound)