Chloride Group Rejects Emerson Acquisition Bid
Emerson Electric recently made another unsuccessful attempt at acquiring UK-based Chloride Group plc, making a $1.1 billion offer to combine two leading makers of uninterruptible power supply (UPS) equipment. Emerson stated that acquiring Chloride would solidify its position in Europe and other key geographic markets, transform Chloride from a regional into a global competitor, and leverage Emerson’s customer relationships to accelerate growth of Chloride’s industrial UPS product offering.
"Chloride is a good business with a solid management team, said David N. Farr, Chairman, Chief Executive Officer and President of Emerson. "But in a market where scale is becoming increasingly important, we believe that Chloride will be better able to compete long-term with the benefit of the strength and resources of Emerson. As part of Emerson, Chloride will have the support and long-term investment capability necessary to prosper and compete in the global marketplace."
The Board of Chloride quick issued the following response:
"Chloride confirms that it received an approach from Emerson on Friday 23 April 2010, regarding a possible offer for the Company at 275 pence per share in cash. The approach is subject to a number of pre-conditions, including due diligence and the unanimous recommendation of the Board of Chloride.
"The Board confirms that it held discussions in 2008 with Emerson with regard to a 270 pence per share offer and this offer was rejected as it undervalued the company.
"Since Emerson’ s approach in 2008, Chloride has continued to develop the business and its strategy, both organically and through acquisition, and the Board believes the company has better prospects as result of the steps that it has taken in this regard. Accordingly, the Board of Chloride considers that this latest offer proposal from Emerson continues to significantly undervalue the company and accordingly rejects it.
"There is no certainty that any offer for the company will be forthcoming nor as to the terms of any such offer."