Skadden client Colfax outbids Melrose in battle for Charter

A variety of firms are playing a part in US manufacturing group Colfax’s £1.5bn cash and shares bid for Charter International, which has trumped the initial offer by Melrose for the FTSE250 Dublin-based engineering company.

Andy Ryde
Andy Ryde

Colfax, a Maryland-headquartered pump and fluids handling products manufacturer, has offered 910p per share for Charter, which is a 7 per cent premium on the 850p per share proposed by Melrose two weeks ago.

Skadden Arps Slate Meagher & Flom is advising Colfax, with an M&A team comprised of partners Scott Simpson, Michael Hatchard and Shaun Lascelles. Corporate finance partner James McDonald and banking partner Clive Wells are also involved.

Slaughter and May is advising Charter, with M&A partners Andy Ryde and Robin Ogle taking the helm. The firm also advised Charter on Melrose’s earlier takeover bid in June, which proposed 780p per share.

Simpson Thacher & Bartlett is advising turnaround specialist Melrose, with partner Adam Signy working alongside finance partner Stephen Short and senior M&A associate Clare Gaskell.

Shearman & Sterling is also playing a part in the deal, advising Charter on US issues related to the transaction. London-based M&A partners Creighton Condon and George Karafotias are part of the team, along with European finance counsel Gabrielle Wong and New York-based litigation partners Stephen Fishbein and Alan Goudiss and antitrust partner Beau Buffier.

Colfax’s proposal includes an offer of 730p in cash and 0.12 new shares per Charter share. The proposed transaction would be financed by a ­combination of balance sheet cash, new bank debt and new equity. New and existing investors, including boutique investment bank BDT Capital Partners, would provide the new equity of approximately £510m.

Deutsche Bank and HSBC, from which Colfax has received around £1.3bn in commitments, would arrange the new bank debt.

California-based Munger Tolles & Olson has been advising BDT Capital Partners. The team includes ­corporate partners Mary Ann Todd, Brett Rodda and David Lee, along with tax partners David Goldman and Stephen Rose. Macfarlanes partners Luke Powell and Charles Martin are advising on UK aspects.

As The Lawyer went to press the Charter board had unanimously decided to ­recommend Colfax’s offer to its shareholders.

However, the door remains open for Melrose to come back with an alternative offer.

Charter is composed of two international engineering businesses. ESAB is focused on welding, cutting and automation, while Howden concentrates on air and gas handling.